She Beat the SEC ‘Team’ Over Sex Harassment

On the witness stand last summer, her eyes on her hands in her lap, she looked pale and fragile, hesitant, as though she might break at any moment. But when the associate general counsel of the Securities and Exchange Commission rose to cross-examine her, she stiffened. She had come this far and she wasn’t going to back down.

She had been described by one psychiatrist who was a witness for the SEC as having a paranoid personality disorder and by a psychiatrist who testified for her as having a “depressive reaction . . . a classic sadness, feeling of melancholy, hopelessness.”

But there was something in Catherine Broderick the experts couldn’t see, and whatever that something was led her to struggle for nine years to be heard and believed when she said that the SEC Washington regional office, where she worked as an enforcement attorney for five years, was like “a brothel,” a place where some of the senior attorneys running the office had affairs with their secretaries and gave them cash awards, raises and promotions, where parties and long afternoons of drinking or jogging and little work were the accepted behavior for those who were part of “the team.”

“I was trapped in that office and couldn’t get out,” she says. “They destroyed the relationship with someone I was in love with and very much wanted to marry. They just took everything. You lose hope in the future. You’re powerless to do anything.”

Broderick came to the 40-person office in Arlington, Va., in 1979, an idealistic 28-year-old who dreamed of trying enforcement cases. But that dream was shattered when she began complaining of sexual harassment by several managers shortly after she arrived. In 1984, she was transferred to SEC headquarters, where she now reads corporate reports, reviewing filings to ensure that their actions comply with federal regulations.

“The (Washington regional office) managers created their own little world,” Broderick says now. “They wanted to be big fish in their own little ponds. Each one had to have his own girlfriend or mistress in the office, as if it was a competition. They expected you to come in and drop your integrity at the door . . . . They thought I was going to go away. I wasn’t going away.”

She sometimes doubted her own abilities as she suffered the humiliation of low performance evaluations after she complained. She was denied promotions, told she was a “festering morale problem” and threatened with firing. When she fought back in court, she was faced with a system that provided free legal counsel for the SEC attorneys she complained about, while she had to sell some of her favorite possessions to pay her own legal bills.

Male managers spoke to her only when they had to, and many of her female colleagues were so afraid to be seen with a whistle-blower that they would talk to her only in the women’s bathroom--and only when no one else was there, she says. She applied for more than 100 jobs within the SEC and outside the agency. But in the good-old-boy network of the securities bar, she has been blackballed, she says.

At times since she first complained of her managers’ affairs, she felt so low that she thought of committing suicide. “They wanted to see me cry,” she says, sitting in her Arlington town house. “I cried a lot, but I never backed down.”

Now, most of Broderick’s struggle is over.

U.S. District Judge John H. Pratt, after finding on May 13 that the SEC’s Washington regional office was a work environment permeated by sexual harassment and discrimination and that SEC managers had retaliated against her when she complained, handed down a landmark order Thursday.

Pratt ordered that Broderick be granted three promotions with retroactive pay plus interest, giving her GM 15 status with commensurate title in the General Counsel’s office or the Division of Enforcement. All negative evaluations were to be removed from her file.

The judge also prohibited the SEC from taking retaliation and ordered the agency to end the “sexually hostile environment” Broderick had complained of and hire an Equal Employment Opportunity expert in consultation with plaintiff’s counsel to review commission policies and make recommended changes in the workplace.

The commission further agreed to hire an impartial third party to investigate the actions of the three men Broderick accused of misconduct.

“We changed the world,” an exultant Broderick exclaimed after the ruling, smacking her fist into her palm.

Her attorney, S. Beville May, herself a former SEC employee, said the decision completely vindicated her client and broke new ground by permitting the client and the agency to work out remedial measures together.

To the team of high-powered lawyers in the SEC’s enforcement division, where Broderick went to work in August, 1979, she may well have looked like a pushover. These, after all, were the young, tougher-than-tough fraud fighters charged with digging out criminal activities such as insider trading. Tall and thin, Broderick, 37, has long straight brown hair. Her movements are almost birdlike, nervous, and she has a habit of looking away when asked questions about her feelings.

It didn’t take long for Broderick to encounter something more than the usual Washington workaholics at the SEC office in Arlington. During her first week there, then-branch chief John L. Hunter insisted that he drive her home, barged into her apartment and took a tour, including her bedroom, according to the court’s findings. On another occasion, the court found, Paul Leonard, then regional administrator of the office, became drunk at an office party, untied the sweater Broderick had wrapped over her shoulders and kissed her.

In its 1980 guidelines, the Equal Employment Opportunity Commission defined sexual harassment as unwelcome or unsolicited verbal, physical or sexual conduct that is made a term or condition of employment, is used as the basis for employment or advancement decisions, or has the effect of unreasonably interfering with work or creating an intimidating, hostile or offensive work environment.

Pratt found that Broderick was the victim of sexual harassment by at least three of her supervisors. But he went on to say that “more importantly, plaintiff, without any doubt, was forced to work in an environment in which the (Washington regional office) managers . . . harassed her and other employees, by bestowing preferential treatment upon those who submitted to their sexual advances.” The judge said it made no difference whether those relationships were consensual or not.

Legal scholars say that the real significance of the case is that the whole workplace was on trial, and was found to have violated federal discrimination laws. Broderick, said the judge, simply couldn’t get ahead because her bosses were so busy conferring job benefits on the women they were socializing or sleeping with.

When Broderick first filed her complaint with the SEC, Beville May, an enforcement attorney who worked at SEC headquarters, was appointed to represent her in the administrative investigation.

“The first time I talked to Cathy on the telephone, I thought, ‘Either this woman is crazy or it’s a miniature Watergate,’ ” says May, now an attorney in private practice in Boston. “It involved too many high officials. It was just unbelievable.”

Because complaints by federal employees must first be investigated by their own agencies, Broderick’s case began in the SEC’s Equal Employment Opportunity office in February, 1984. In June of 1986, that office issued a report that concluded, in part, that: “Romantic involvements between supervisors and those working for them have occurred at the (Washington regional office), and some of the liaisons were common knowledge to the employees. There were frequent parties, afternoon-long lunch ‘hours,’ and certain . . . employees went drinking together during the workday. All in all, an atmosphere existed where drinking and sexual involvements among staff were not unusual, and where most of it was engaged in by members of upper management.”

Specifically, the report detailed “relationships” between five different couples. All of the men were top managers of the office. Despite that, the commission concluded that what went on did not constitute sexual harassment or discrimination against Broderick.

Judge Pratt found differently. Not only was it sexual harassment, but officials at the highest levels of the SEC knew of the incidents and did nothing, he said.

Pratt said a number of incidents included in the testimony showed a “sexually hostile work environment”:

--Hunter admitted he had an ongoing sexual relationship with a secretary from December, 1981, to June, 1984. From January, 1980, to her resignation in November, 1984, the secretary received three promotions, a commendation and two cash awards. Hunter was not disciplined for his conduct, and received 10 salary increases between October, 1983, and January, 1987. He is now the assistant chief trial attorney in the enforcement division at SEC headquarters.

--Leonard made sexually suggestive remarks about Broderick’s dress and figure. He admitted becoming drunk at an office party and kissing her, but said that he was “acting as a buffoon.” He retired in August, 1985.

--James C. (Cliff) Kennedy, as assistant regional administrator of the Washington regional office, promoted the career of a staff attorney from the time she joined the office in March, 1982. The judge concluded there was “no direct evidence” of a sexual relationship, but noted “that there was extensive socializing between them during business hours, both within and outside the office.” The woman rose from a Grade 11 to Grade 14 in slightly more than two years with Kennedy as her mentor, becoming branch chief. Kennedy also admitted approaching his administrative assistant at an office retreat in 1983, putting his hands on her hips and remarking that she had “sexy, wide hips.” Kennedy is now head of the Philadelphia Regional Office of the SEC, into which the Washington regional office was merged in May, 1986.

--Herbert Brooks, then assistant regional administrator for regulation of the office, had a sexual relationship with a secretary who made rapid career progress, receiving two grade promotions, a cash award and a perfect evaluation during one of the years when Brooks was her supervisor, the court found. Brooks is now assistant regional administrator of the regulation division for the Philadelphia office.

Hunter, Kennedy and Brooks appeared to testify at the trial; Leonard testified by deposition. Judge Pratt found that the testimony of Hunter and Kennedy was “less than forthright” and that Brooks’ testimony was “false and incredible.” “In the face of countervailing evidence, we regard the testimony of all these witnesses as deserving of little credence,” he found.

Brooks declined to comment on the case. Kennedy, Leonard and Hunter did not return phone calls requesting comment.

John Shad, who was chairman of the SEC when Broderick filed her complaint and is now ambassador to the Netherlands, declined to comment after Pratt’s ruling except to say that Broderick’s complaint was investigated by the SEC ethics counsel and the office of the general counsel. “They advised the commission that no conduct rule violations had occurred,” he said.

But David S. Ruder, now chairman of the SEC, will hire an outside consultant to review the agency’s Equal Employment Opportunity procedures and programs and make recommendations as a result of the case, said Linda D. Fienberg, his executive assistant. A second consultant will study whether disciplinary measures are indicated for the three managers--Kennedy, Hunter and Brooks--who were found to have sexually harassed Broderick. Both consultants will report directly to the chairman, Fienberg said.

Boxes line the dining room walls of Broderick’s town house, giving it a just-moved-in look though she has lived there for three years with her cat, Morris. A visitor is left with the impression that outside of the antiques she loves to collect, Broderick’s life has been almost totally focused on this case for years. Even for interviews, she prepares meticulous notes of dates and places, and constantly refers to the people in the Washington regional office as though everyone knows them, as if they are part of some elaborate play that everyone has seen.

She gave up her yearly trips to Europe after the case was filed, though she plans a trip to the Soviet Union this fall. She hesitates when asked what will come next in her career. “For so long,” she says, “I stopped thinking about the future because it was such a blank.” Just the case and getting through it, getting to a point where someone will look at her as the attorney she wants to be and not the paranoid complainer that SEC attorneys portrayed in court.

One of the things she wants to do is burn her performance evaluations, the ones with comments about her “unacceptable” work, complaints of tardiness and unwillingness to be a “team player.” The court found instead that Broderick was “a capable worker and that her problems arose from her inability or unwillingness to change her attitude toward her supervisors.”

Now she speaks bitterly about many of the people she worked with. “They did everything they could to make me feel miserable. It’s like stripping off layer after layer until there’s nothing left. At times, I would just say to myself, ‘God, what have I done?’ ”

Though she is tenacious, she doesn’t seem tough.

She is in therapy, trying to work through the anger. Her counselor “has sat and listened to me rant and rave,” she says. “There’s so much rage.” She talks about feeling that she was in a prison, trapped, shaken because her self-confidence was destroyed. She had nothing to lose by fighting back, she says, because they had already taken everything away.

She is hurt by the fact that other SEC attorneys who came to see parts of the trial did not sit on the plaintiff’s side of the courtroom. And, even though she’s won her case, she still suffers from fears of retaliation by supervisors at the SEC. When she went to work after getting word she had won her case, she found that another female attorney had put a note of congratulations on her door and signed her name. Broderick took it down, fearing that the woman would be somehow punished for the note.

She says she would like to stay, for a while anyway, and get a chance to prove herself. She would like to have time to settle the estate of her father, who died of cancer two months before the decision. A former federal employee himself--an engineer at Goddard Space Flight Center--he was initially against her filing suit, but supported her efforts near the end.

She would also like to write a book about her experience and, in her words, “to let this die down before I start applying for jobs.”

Many of her friends from law school are now becoming partners at private firms, but Broderick has no illusions about her future. “I’ve been bad-mouthed for so long that perhaps people will never really know my work,” she says. “Even winning didn’t change that.”