Smith Barney Close to Settling Sex-Harassment Suit
Smith Barney has reached a tentative deal to settle a sex-harassment lawsuit probably best known for its allegations of a “boom boom room” in a branch office’s basement where male workers engaged in lewd fraternity-house antics.
The disclosure was made in federal court Thursday by lawyers for the New York-based brokerage firm and the 26 former and current female workers who claimed they were subjected to obscene behavior by brokers and managers for years. The suit also alleged the firm discriminated against women in hiring, promotion and pay.
The agreement in what is one of the largest sex-harassment cases against a Wall Street firm was reached after four days of mediation. It could help end an embarrassment and public relations nightmare for Smith Barney.
Terms of the tentative agreement were not disclosed. But lawyers for both sides told U.S. District Judge Constance Baker Motley in a hearing Thursday in New York that they hope to present a final proposed settlement to the court on Nov. 18 for approval.
A spokeswoman for Smith Barney, the brokerage unit of Travelers Group Inc., would not comment beyond what was disclosed in court. Lawyers for the plaintiffs could not be reached immediately.
Smith Barney officials had staunchly disputed allegations that there was a widespread pattern of discrimination against women at the firm. They also had publicly denied that they would settle the case.
The Wall Street Journal, which in August broke the news of the settlement talks, had said the proposed deal didn’t call for the securities firm to pay any lump-sum cash payment similar to Texaco Inc.’s $176-million accord last November in a racial-discrimination lawsuit.
The newspaper, citing people familiar with the situation, said Smith Barney would set up a system allowing women who worked at the firm to bring sex-harassment or discrimination claims, which would most likely be resolved by a mediator. As a result, any cash payments or other restitution would be made on an individual basis.
The lawsuit was filed in May by three women who worked at the firm’s Garden City, N.J., branch. It was later amended to include claims by former and current employees at other Smith Barney offices.
The case attracted widespread media attention with its allegation of a special basement “boom-boom room” in the Garden City office featuring a toilet bowl hanging from the ceiling and where Bloody Marys were chugged out of a garbage can.
