NEW YORK -- Smith Barney Inc. is expected to announce today a settlement of a class-action lawsuit that accused the firm of denying women promotions and doing nothing while brokers harassed women employees.
Under the settlement, women employees would take their claims to an independent arbitrator outside the securities industry, people involved with the negotiations said.
Such a move is a radical departure for a Wall Street firm. Wall Street firms have typically fought long and hard to have all disputes -- whether with clients or employees -- settled by industry arbitrators. Smith Barney will also institute programs aimed at encouraging fair treatment of women and minority employees.
The settlement also does not include any fixed amount of money. A person close to the claimants said yesterday that the cost of the settlement might run to hundreds of millions of dollars. But a senior executive at Smith Barney who spoke on the condition of anonymity said that it was unrealistic to talk about such huge sums of money.
Mary Stowell and Linda Friedman, partners at the Chicago law firm of Leng Stowell Friedman & Vernon, who are representing the Smith Barney women, did not return messages left at their offices yesterday. Michael E. Schlein, director for development at Smith Barney, declined to comment.
The class action was filed in U.S. District Court in Manhattan in May 1996 by three female employees of Smith Barney, and was later joined by 22 other current and former employees of the firm.
The suit contended that Smith Barney, a subsidiary of Travelers Group Inc., had denied women promotions and that male brokers had subjected them to abuse and unwanted sexual advances.
Their complaints, the suit and a related lawsuit filed in California said, were either ignored by Smith Barney managers or investigated in a prejudiced manner in which the identities of the women were disclosed prematurely, exposing them to retaliation.
In one instance, at a Smith Barney branch on Long Island, women were allegedly groped and humiliated by senior male colleagues.
The settlement covers any woman who worked at Smith Barney in the retail, investment banking or capital markets divisions since May 20, 1993.
Pub Date: 11/18/97