Wall Street's Bias Against Female Bosses Slowly Crumbles

NEW cracks are appearing in the glass ceiling - the invisible barrier that keeps women out of top executive jobs.

The contentious issue of employment discrimination on Wall Street is being raised anew here following three events last week involving women and the workplace:

* On Nov. 8, a United States District Court judge tossed out a jury verdict that Goldman, Sachs & Company had discriminated against one of its top women employees. Lawyers for the woman immediately said they would appeal the judge's ruling.

* On Nov. 9, the US Supreme Court made it easier for women litigants to prove on-the-job sexual harassment.

* On Nov. 10, a new study showed that women continue to lag behind men in being asked to fill top corporate positions. Women's groups also are asking if the pace of progress has been fast enough. Of the Fortune 500/Service 500 companies, only 6.2 percent of corporate directors are women.

Wall Street has traditionally been regarded as one of the last major ``male bastions'' of corporate America. Although many women and minorities can be found in mid-level and clerical jobs, men have tended to fill front-office positions.

Morgan Stanley & Company, Paine Webber Group, and Salomon Brothers, for example, have no women directors on their boards, according to Catalyst, a nonprofit group advocating employment opportunities for women. Merrill Lynch has one; Bear Stearns & Company has two.

Still, women are increasingly found among the managing directors, or partners, of the larger private investment houses.

And job openings for women on Wall Street in the past five years have grown steadily, says Dale Winston, president of Battalia Winston International, an executive search firm. ``Over the last few years every senior position that we've worked on'' has involved a request by management to find both women and minority candidates, she says. Since it takes 10 to 15 years for most corporate executives to ``track upward'' into top management positions, many women executives should be arriving in key front-office jobs in the next five to 10 years, she says.

Job gains for women are also occurring in the mid-level ranks on Wall Street, such as research positions. The top 20 investment firms employ between 750 and 850 of these researchers or analysts, depending on the state of the economy. ``Women are increasingly filling these posts,'' says Marcia Boysen of Nelson Publications, a Port Chester, N.Y. firm that tracks analysts.

Meantime, last week's federal court decision involving Goldman, Sachs, has drawn close attention from professional women's groups. On Oct. 28, a federal jury decided in favor of Joanne Flynn, a former employee of Goldman, Sachs. As part of her job duties, Ms. Flynn had dismissed a male employee - an act, according to Flynn, that angered her firm. The jury held that the investment house had denied Flynn a promotion and then fired her because she was a woman.

But last week, US judge Kimba Wood, who had presided over the Flynn case, tossed out the verdict, saying there was not enough evidence for the jury to make a decision. Goldman, Sachs had argued that Flynn was fired in part because she could not get along with her supervisor, who was also a woman. The case now goes before an appellate court.

The Flynn case is one of the few sex discrimination cases on Wall Street to go to trial. Most employees of investment houses are required to sign an arbitration agreement before being hired. In employment disputes an arbitrator decides whether discrimination has occurred. Arbitration decisions cannot be appealed. But investment house officials sit on the boards of the exchanges from which arbitrators are assigned to such cases.

Flynn had not signed an arbitration agreement.

``We are very concerned about the [fairness of] arbitration,'' says David Moulton, staff director of the House Subcommittee on Telecommunications and Finance. The General Accounting Office is preparing a report on employment-related arbitration.