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Smith Barney Wins Arbitration Order in `Boom Boom' Case

Smith Barney Wins Arbitration Order in `Boom Boom' Case

Two female plaintiffs in the famous Salomon Smith Barney “Boom Boom Room” sexual harassment case were ordered by a U.S. District Judge in New York on Friday to submit their claim to an NASD arbitration panel.

When plaintiffs Pamela Martens and Judith Mione worked at Smith Barney, they signed U-4 agreements requiring them to arbitrate complaints against the firm. U.S. District Judge Constance Baker Motley said in her ruling that Martens and Mione are bound by the U-4 arbitration agreement that they had signed. The judge also said that every federal case in New York since 1999 has upheld the enforceability of the U-4's arbitration clause.

The decision is a victory for Smith Barney, but Gary Phelan, the attorney for the plaintiffs, is “not disappointed” with the ruling because “the court did not uphold the validity of Smith Barney’s private arbitration agreement.” The question of the validity of Smith Barney’s private arbitration agreement will be decided in arbitration.

Friday’s decision really doesn’t change much of anything, according to Phelan. “All we have to do now is prove our case in arbitration,'' he says.

Phelan says Motley’s order will be appealed after the arbitration process. He also says that legislation is pending in Congress that would “outlaw mandatory arbitration agreements in employment bias cases.”

Phelan says the dollar amount that the plaintiffs are seeking is not specified at this time. “What my clients want is a jury trial in court,” he says.

The ``Boom Boom Room'' case gained national attention after allegations that women in Smith Barney’s Garden City, Long Island, branch were subjected to sexual harassment. Martens and Mione chose not to be included in a larger class action suit against Smith Barney, filed in 1988. They filed their own case. Meanwhile, nearly 90 percent of the 1,800 class action suit members have been settled, Phelan says. Under the agreement of the settlements, Smith Barney employees could resolve complaints through outside mediation. The firm subsequently made settlement offers to individual women.

A Smith Barney spokesperson, or an attorney representing the firm, could not be reached for comment.

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