Gender, work, and Wall Street
Analysts expect the Morgan Stanley case to influence trading-firm culture.
NEW YORK — A certain female executive has been complimented for her hard work, but occasionally she loses her temper. As her executive coach tells it, the employer, a financial service company, told her she would not be promoted because of the outbursts.
"She looks around her and sees men losing their tempers all the time," says the coach, Lisa Parker of the Strickland Group. "She wants to know why the rules are different for men."
Different rules, "men-only golf outings," subjective pay and promotion standards - these are just a few of the challenges women cite on Wall Street.
The battle for gender equity in the workplace has moved powerfully into the courtroom. When Morgan Stanley settled a sex discrimination suit Monday, on behalf of 340 women for $54 million, it was the second-largest payment ever in a case brought by the Equal Employment Opportunity Commission.
Less than a month ago, a federal judge allowed a class-action lawsuit against Wal-Mart to go forward on behalf of 1.6 million female employees.
While the Morgan Stanley settlement is the first of its kind on Wall Street, another financial powerhouse, Merrill Lynch, will defend itself next month against a sex discrimination suit brought in London by a female executive.
If some brokerage trading rooms seem like frat-house parties, it can be even tougher for women at the highest levels. No women head any major brokerage or investment banking firms. But, despite this image as a male bastion, it is also slowly changing with many of the barriers going the way of the dumb blonde joke.
One indication of the changes: The Morgan Stanley settlement includes money to train executives, and some of it may go toward scholarships for women who want to go into finance. But most important, employment lawyers say, the settlement will prompt other Wall Street firms to evaluate their own practices.
"I think the publicity and the amount of the payment will be influential to businesses as they evaluate their own pay and promotion practices," says Michael Karpeles, a partner in the Chicago law firm, Goldberg Kohn Bell Black Rosenbloom & Moritz, Ltd. "To bring an entire industry into compliance will take some time."
There are already some signs of progress. In a survey conducted last fall, the Securities Industry Association (SIA) found that 27 percent of the managers in large firms were "executive management" compared to 20 percent in 2001. And the survey, conducted by Catalyst, a nonprofit that focuses on diversity issues, found that 92 percent of all mid-sized firms incorporate diversity training, compared with 43 percent in 2001.
Despite these increases there are still plenty of Wall Street women who feel slighted.
Winning such lawsuits is not easy for the plaintiffs. Companies come armed with personnel records - paper trails of an employee's imperfections.
At the same time the plaintiffs have two distinct legal burdens. First, they must prove that defendants treated them differently from other employees. Second, they must prove motive - that the company condoned behavior that damaged the plaintiff.
On the other hand, most corporations don't want to face the unwelcome publicity such lawsuits bring. The Morgan Stanley case illustrates some of the unpleasant allegations the company would have faced.
The plaintiffs' complaint list includes: firm sponsored golf outings where women were excluded; a company-paid trip to Las Vegas where executives went to see sexually-oriented entertainment; and two managing directors who allegedly admitted to condemning women employees for behavior that they had tolerated in men.
The Morgan Stanley women also complained about sexual harassment. The lead plaintiff, Allison Schieffelin, allegedly turned down a promotion to avoid a supervisor who had made unwelcome sexual advances. The complaint says the men got around anti-harassment measures by using a private telephone line - termed "the rude wire" - for telling lewd jokes.
Ironically, Morgan Stanley made an attempt to listen to the executives' laments. In mid-1998, at a dinner, Ms. Schieffelin and five other female officers spoke of the harassment and discrimination. The male supervisor replied it was a "cultural thing" that could not be changed overnight. He allegedly advised the women to work toward equality for "the next generation of women" at the firm.
Although Morgan Stanley agreed to the settlement, Judge Richard Berman said it was not an admission of guilt.
Still, an EEOC spokesman calls the settlement "historic" since it requires Morgan Stanley to take immediate action to combat discrimination.
"We are confident that the settlement will serve as a role model for the financial services industry," says David Grinberg, a spokesman for the EEOC in Washington.
Many women who have worked on Wall Street say females need to have a thick skin to survive and thrive. "Many things are hard-wired and it takes a lot to rewire it," says Davia Temin, who worked for a variety of Wall Street firms before founding her own public relations and investor relations firm.
Fancy titles are not enough, adds Janice Reals Ellig, president of Gould, McCoy, Chadick & Ellig. She knows many female managing directors of partners on Wall Street. "Even [when women] have the titles, they are not making decisions."