Settlement OKd in Smith Barney Bias Suit

<i> From Times Staff and Wire Reports</i>

A federal judge on Friday approved a unique settlement of the sex bias case against Salomon Smith Barney, allowing the investment house to close an ugly chapter in its treatment of women.

Although U.S. District Judge Constance Baker Motley was skeptical about the plan’s fairness during a long hearing earlier this week, lawyers for Smith Barney and a large group of plaintiffs were successful in changing her view. Smith Barney, now Salomon Smith Barney, is a unit of Travelers Group Inc.

The ruling could potentially affect 22,000 women who worked for the company between 1993 and 1997.


“We are delighted,” said Mary Stowell, one of the Chicago lawyers representing the plaintiffs. “We have received over 1,000 calls from women who are interested” in participating in the settlement.

Motley said the settlement of the class-action bias case does not constitute an admission by Smith Barney of any wrongdoing. The firm will bear all costs associated with notifying 22,000 potential claimants about the settlement.

“We believe the settlement focuses on effecting real change and progress, rather than simply delivering monetary awards,” Smith Barney said in a statement.

Marianne Dalton, 37, of Westlake Village was one of 23 women who filed the initial class-action bias complaint. A retail broker for Smith Barney’s Los Angeles office in 1995, she said she repeatedly witnessed her boss changing his clothes.

“I would hear unbelievably lewd comments about his personal life” while he would strip to his underwear, Dalton said. When she reported her experiences to management, she said she was transferred to the Beverly Hills office. But she said her reputation for speaking against her boss preceded her. When she quit a year later, she could not get a similar position elsewhere.

“I was blacklisted . . . because of this case,” Dalton said.

After the class action was filed, other women who had worked at Smith Barney during the four-year period--believed to number about 22,000--were encouraged to come forward.

Dalton and the 22 other original complainants will receive a total of $1.9 million as part of the settlement, which does not include punitive damages, Stowell said.

Women employees alleged that they were harassed and intimidated by senior male workers who engaged in fraternity-house antics in the “boom-boom room,” a basement space in a Smith Barney branch in Garden City, N.Y., on Long Island.

The suit also alleged that women were denied promotions at Smith Barney and that the firm ignored complaints of abuse and unwanted sexual advances and investigated claims in a way that subjected female workers to retaliation.

The settlement, reached in November, allows the women to resolve discrimination claims using an independent arbitrator instead of being forced to go to mandatory industry-sponsored arbitration.

In the proposed settlement, the firm will spend more than $15 million over four years on programs to recruit and promote women and minorities. That figure could rise under a penalty provision of the settlement.

Potential claimants were first notified about the class action in January, and 38 women chose to drop out. Plaintiff lawyers said about a third of those said they did not have any discrimination claims. A second notice will be published and sent to potential claimants.