Wall Street litigation leads to important workplace reforms

Bank of America agreed on Friday to pay $39 million to women who worked in its Merrill Lynch brokerage operation, another costly settlement of a discrimination case filed by its employees.

The agreement, filed Friday evening in a federal court in Brooklyn, was the second by the nation’s largest bank over 10 days. Last week, Merrill Lynch told a federal judge in Chicago that it would pay $160 million to settle an eight-year-old racial discrimination suit filed on behalf of 700 black brokers.

With the new agreement, Merrill will have paid out nearly half a billion dollars to settle employee discrimination claims over the last 15 years.

The case settled on Friday was originally brought by women who had worked in the brokerage division of Bank of America, but it was amended to include women who were brokers at Merrill Lynch after the bank bought Merrill. The money is expected to be divided among as many as 4,800 current and former employees of the two brokerage operations.

Merrill, which has about 15,000 brokers worldwide, also agreed to change its policies to give women a better chance of succeeding. The firm will bring in an applied organizational psychologist to study some of its policies, particularly how teams of brokers are formed and how they share customers’ accounts.  A Merrill spokesman said in a statement that the settlement “includes a number of additional and enhanced initiatives that will enrich our existing diversity, inclusion and development programs, providing even more opportunities for women to succeed as financial advisers.”

Merrill has a long history of litigation over its treatment of women and minority employees. In the 1970s, the firm settled a discrimination suit by consenting to make its work force more diverse but never met that goal.

Two decades later, Merrill settled another class-action suit brought by women who worked at the firm and led by a plaintiff named Marybeth Cremin. Merrill settled that suit, known as the Cremin case, in 1998 by agreeing to a process for settling disputes with more than 900 women who filed claims. Otherwise, each of the women would have had to take her claim to industry-sponsored arbitration — a standard agreement in employment contracts on Wall Street.

Merrill ended up paying about $250 million to settle the claims in the Cremin case. It also agreed to make changes to give female brokers a better chance of succeeding in the male-dominated brokerage business.

Less than 10 years later, three women who worked in Bank of America’s brokerage business contended that they faced the same sorts of obstacles that Ms. Cremin had cited at Merrill. They first took their complaints to the federal Equal Employment Opportunity Commission in 2007.

In 2010, they sued Bank of America for practices at both the bank and Merrill Lynch. Judy Calibuso, one of the lead plaintiffs, was a longtime broker for the bank and now works for Merrill Lynch. Another lead plaintiff, Julie Moss, said that “this settlement will advance our efforts to foster diversity and professional success within the work force.”

“Speaking generally of the industry, there have been changes that have attempted to address the gender disparity that exists, but it hasn’t solved the problem,” Plaintiff’s counsel said. “It’s still a well-known secret that women make less than men on Wall Street, and that’s true in the financial advisory world. We think the settlement is a great settlement that increases opportunities for women at Merrill Lynch going forward as financial advisers.”

Pass the Pregnant Workers Fairness Act

A report released last week by two legal advocacy groups found pregnant workers are routinely discriminated against when they need accommodations due to the physical demands of pregnancy.

The DC-based National Women’s Law Center and Better Balance in New York found that women workers around the country, particularly those in low-wage jobs and fields predominately held by men, faced a number of barriers that forced them out of work earlier than planned; caused miscarriages, pregnancy complications and other health problems; and put the women and their families in dire economic straits.

The report calls for the passage of the Pregnant Workers Fairness Act, introduced in Congress last month, which seeks to clarify the intention of the 2008 amendment to the Americans with Disabilities Act as it applies to pregnant workers, who are entitled to be accommodated on par with employees with temporary disabilities. The report also calls for the Equal Opportunity Employment Commission (EEOC) to do more to inform and guide employers about their legal obligations to pregnant workers.

The EEOC has litigated a host of gender and pregnancy discrimination cases including the recent appeals court victory in the case of a Texas woman who was fired for asking her employer if she would be able to pump breast milk when she returned to work. But the report’s authors want the agency to do more to prevent discrimination from occurring in the first place.

“The thing about pregnancy is that it’s a relatively short period of time, and if a woman has to pursue her case through the legal process, probably she’s already lost,” said Liz Watson with the National Women’s Law Center. “The sooner we get clarification from the EEOC about what the law requires, we’re going to be able to head a lot of this off.”

The report highlights the stories of several women including Peggy Young, who worked for UPS when she said she was told the company’s light duty policy did not extend to pregnant workers and that she could not come back to work until she was no longer pregnant because she was “too much of a liability.” Young asked the US Supreme Court to review her case after an appeals court ruled that UPS did not violate the 1978 Pregnancy Discrimination Act, which says employers must treat pregnant employees the same as other workers with the similar ability to do their jobs. She lost her health insurance and disability rights related to pregnancy and childbirth. “What started as a very happy pregnancy became one of the most stressful times of my life,” she said.

Guadalupe Hernandez (a pseudonym) worked at a fast food restaurant and received excellent performance reviews. But when she became pregnant, her supervisor refused her bathroom breaks and forbade her to drink water on the job although other workers were permitted to do so. He eventually fired her in front of her coworkers. “For the first time in my life, I had to ask for government assistance,” she said. “I tried to look for other work, but every time I went to a potential employer they looked at my bellow and said ‘no.’ My husband, who was not working at the time, my older child and my baby paid the price.”

“By all means this is something we are seeking to eradicate,” said EEOC spokesperson Justine Lisser. She said EEOC’s recently issued strategic enforcement plan for fiscal years 2013 to 2016 will give priority to issues associated with significant demographic changes. A May report by Pew Research found 40 percent of working mothers are now the primary income earners for their families.

“Speaking anecdotally, a lot of it is not subtle compared to other forms of discrimination that we see,” said Lisser. “A lot of it is the manager telling the employee, ‘We’re putting you on reduced hours because pregnant women need to rest; my wife needed to rest, so you need to rest.’ ”

The economic repercussions of this type of overreach can be devastating for expecting mothers and their families. Other forms of workplace discrimination put the health of expecting mothers at risk. Watson said the Pregnant Workers Fairness Act is a necessity to protect simple accommodations like allowing pregnant workers to stay off high ladders, drink water on the job and sit on a stool instead of stand. Women who work in low-wage jobs where they may have little control over their duties and work conditions and are under close supervision stand to benefit the most from these types of improvements, but Watson said it doesn’t end there.

“The more that this right to accommodation becomes more a part of the fabric of the workplace,” she said, “it’s going to be good for all workers.”

Watson thinks employers would benefit, too. She said the employers profiled in the report “are often making decisions that are, frankly, against their economic interest, that are resulting in higher workforce turnover, that are lowering employee morale, that are making it harder for employees to do their jobs.” She and her coauthors found the cost of accommodating pregnant workers was zero. The Job Accommodation Network (JAN) has found that half of accommodations for workers with disabilities cost employers nothing, and those that cost, typically involve a one-time outlay of about $500.

In 2006 to 2008, close to 88 percent of mothers who worked while pregnant worked into their last two months of pregnancy, and 82 percent worked into their last month of pregnancy, according to US Census data.

Time to guarantee paid maternity leave

Figure 1

The United States remains the only member of the Organisation for Economic Co-operation and Development, or OECD, that does not guarantee mothers any paid time off from work after the birth of a new child. (see Figure 1) In fact, the United States is one of only three countries in the world—along with Liberia and Papua New Guinea—where workers do not have the right to paid maternity leave.

At best, only about half of working mothers in the United States can qualify for 12 weeks of unpaid job-protected leave offered through the Family and Medical Leave Act—but any wage replacement for the time off is at the discretion of their employers. The only exceptions are for women working in California and New Jersey, which both have paid family leave insurance programs. These two statewide programs are financed by a payroll tax on workers and impose no new costs on employers. In fact, employers may save money by reducing costs associated with employee turnover, which is usually about one-fifth of an employee’s salary.

Other countries recognize the many benefits of offering paid parental leave, from increased breastfeeding rates and better child health outcomes to greater paternal involvement in a child’s life when leave is offered for men. Another well-documented effect of paid maternity leave is higher maternal employment: When women have access to paid leave after the birth of a new child, they are more likely to return to work than women who do not have access to paid leave. As a result, there is a strong relationship between maternal employment and women’s access to paid maternity leave.

It should not be surprising, then, that countries guaranteeing longer paid maternity leave tend to enjoy lower child poverty rates as well. (see Figure 3) This is because the majority of women must take at least some time off from work to physically recover from childbirth, and paid leave makes them more likely to return to employment after. It is also because paid leave is associated with higher maternal wages. In the United States, access to paid maternity leave makes mothers less likely to rely on public assistance after the birth of a child.

It is high time that the United States recognizes the need for paid family leave and starts reaping the benefits that other countries have been enjoying for decades.

Woman fired because boss gets erection

A dentist acted legally when he fired an assistant that he found attractive simply because he and his wife viewed the woman as a threat to their marriage, the all-male Iowa Supreme Court ruled Friday.

The court ruled 7-0 that bosses can fire employees they see as an “irresistible attraction,” even if the employees have not engaged in flirtatious behavior or otherwise done anything wrong. Such firings may be unfair, but they are not unlawful discrimination under the Iowa Civil Rights Act because they are motivated by feelings and emotions, not gender, Justice Edward Mansfield wrote.

An attorney for Fort Dodge dentist James Knight said the decision, the first of its kind in Iowa, is a victory for family values because Knight fired Melissa Nelson in the interest of saving his marriage, not because she was a woman.

Nelson, 32, worked for Knight for 10 years, and he considered her a stellar worker. But in the final months of her employment, he complained that her tight clothing was distracting, once telling her that if his pants were bulging that was a sign her clothes were too revealing, according to the opinion.

He also once allegedly remarked about her infrequent sex life by saying, “that’s like having a Lamborghini in the garage and never driving it.”

Knight and Nelson – both married with children – started exchanging text messages, mostly about personal matters, such as their families. Knight’s wife, who also worked in the dental office, found out about the messages and demanded Nelson be fired. The Knights consulted with their pastor, who agreed that terminating Nelson was appropriate.

Knight fired Nelson and gave her one month’s severance. He later told Nelson’s husband that he worried he was getting too personally attached and feared he would eventually try to start an affair with her.

Nelson filed a lawsuit alleging gender discrimination, arguing she would not have been terminated if she was male. She did not allege sexual harassment because Knight’s conduct may not have risen to that level and didn’t particularly offend her.

Knight argued Nelson was fired not because of her gender, but because her continued employment threatened his marriage. A district judge agreed, dismissing the case before trial, and the high court upheld that ruling.

Mansfield noted that Knight had an all-female workforce and Nelson was replaced by a woman.

He said the decision was in line with state and federal court rulings that found workers can be fired for relationships that cause jealousy and tension within a business owner’s family. One such case from the 8th Circuit Court of Appeals upheld a business owner’s firing of a valued employee who was seen by his wife as a threat to their marriage. In that case, the fired employee had engaged in flirtatious conduct.

Mansfield said allowing Nelson’s lawsuit would stretch the definition of discrimination to allow anyone fired over a relationship to file a claim arguing they would not have been fired but for their gender.

 

Pay gap between men and women narrowing

According to the latest numbers released by the Bureau of Labor Statistics (BLS) last week, based on the weekly earnings of full-time wage and salary workers, women now earn 82 percent as much as men – up from 64 percent in 1980.

In recent discussions of the wage gap, a different figure – 77 percent – has been widely cited. That figure it also accurate, but the measure, which comes out in the spring, looks at median annual earnings for full-time year-round workers; it includes self-employed workers, which the weekly numbers exclude, and excludes seasonal workers. The figures are based on the same raw BLS data.

Most notably, in the BLS numbers released the day after Thanksgiving, the earnings of women between the ages of 25 and 34 have shot up fairly substantially over the past 32 years, from 69 percent of men’s earnings in 1980 to 92 percent in 2011.

The gap still widens, though, as women age – a sign that while many young women enter the workforce on a more equal playing field with their male counterparts, they still tend to fall behind on income as they age.

A recent study from Catalyst, a nonprofit organization that promotes women in the business world, found that women in the business world are offered fewer of the “hot jobs” – those jobs with high visibility, central to an organization’s mission, that tend to lead to promotions down the road.

The Catalyst survey of top MBA grads found that men led projects with budgets more than twice the size of women’s, with teams that were more than three times as large, and that posed a higher risk to the company. Men also had roles with significantly more critical responsibility – one reason, Catalyst suggests in its analysis, for the persistent gender gap at senior levels that exists in the business world.

The United States is one of the only countries in the world without any guaranteed paid maternity leave.

Without the subsidized childcare costs that many nations have, many mothers have to factor child-care costs in their decision whether to return to work, and often take a leave of absence – which they’re later often penalized for when they do return to work. And in a labor market where about half of US workers get no paid sick time at all, women are still most often the ones to skip work – and forgo pay – to stay home with sick children or other family members.

Some tips for expecting moms and new moms

Pregnancy discrimination involves treating a woman (an applicant or employee) unfavorably because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth. The Pregnancy Discrimination Act (PDA) forbids discrimination based on pregnancy when it comes to any aspect of employment, including hiring, firing, pay, job assignments, promotions, layoff, training, fringe benefits, such as leave and health insurance, and any other term or condition of employment. If a woman is temporarily unable to perform her job due to a medical condition related to pregnancy or childbirth, the employer or other covered entity must treat her in the same way as it treats any other temporarily disabled employee. For example, the employer may have to provide light duty, alternative assignments, disability leave, or unpaid leave to pregnant employees if it does so for other temporarily disabled employees. An employer may not single out pregnancy-related conditions for special procedures to determine an employee’s ability to work. However, if an employer requires its employees to submit a doctor’s statement concerning their ability to work before granting leave or paying sick benefits, the employer may require employees affected by pregnancy-related conditions to submit such statements.

Impairments resulting from pregnancy (for example, gestational diabetes or preeclampsia, a condition characterized by pregnancy-induced hypertension and protein in the urine) may be disabilities under the Americans with Disabilities Act (ADA). An employer may have to provide a reasonable accommodation (such as leave or modifications that enable an employee to perform her job) for a disability related to pregnancy, absent significant difficulty or expense. The ADA Amendments Act of 2008 makes it much easier to show that a medical condition is a covered disability.

Harassment because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth is a no-no. Harassment is illegal when it is so frequent or severe that it creates a hostile or offensive work environment or when it results in an adverse employment decision (such as the victim being fired or demoted). The harasser can be the victim’s supervisor, a supervisor in another area, a co-worker, or someone who is not an employee of the employer, such as a client or customer.

Under the Family and Medical Leave Act (FMLA) of 1993, a new parent (including foster and adoptive parents) may be eligible for 12 weeks of leave (unpaid or paid if the employee has earned or accrued it) that may be used for care of the new child. To be eligible, the employee must have worked for the employer for 12 months prior to taking the leave and the employer must have a specified number of employees.

Pregnancy accommodation bills introduced in House and Senate

Earlier this Fall, Senator Bob Casey (D-PA) introduced the Pregnant Workers Fairness Act (S. 3565), a bill that would require employers to make reasonable accommodations for pregnant employees and job applicants as well as those with limitations related to childbirth.   Long overdue, and modeled after provisions in the Americans with Disabilities Act (ADA), the Pregnant Workers Fairness Act would create anti-discrimination and retaliation protections for workers who request a reasonable accommodation related to their pregnancy, childbirth, or associated medical conditions, and prevent employers from requiring that a pregnant employee take leave if she could perform her job with a reasonable accommodation. The bill would also make it unlawful for an employer to require an applicant or employee affected by pregnancy or childbirth to accept a particular accommodation.

Title VII rights and remedies would apply to any violations of the Pregnant Workers Fairness Act.   If passed, the measure would direct the Equal Employment Opportunity Commission (EEOC) to issue regulations implementing the law within two years of the bill’s enactment.  In a press release, Sen. Casey said: “Pregnant workers face discrimination in the workplace every day, which is an inexcusable detriment to women and working families in Pennsylvania and across the country,” adding: “My bill will finally extend fairness to pregnant women so that they can continue to contribute to a productive economy while progressing through pregnancy in good health.”  A House version of this bill (H.R. 5647) was introduced by Rep. Jerrold Nadler (D-NY) on May 8, 2012. That bill has not advanced out of committee.

Young women, college and the wage gap

Don’t assume your first pay offer will be the same as what a similar male graduate will get. Fifty years after the Equal Pay Act was passed, studies continue to find a pay gap between men and women. Some of the difference – women earn about four-fifths of men’s pay – can be attributed to women choosing lower-paying fields, or women temporarily leaving the workforce to raise children, or women taking more part-time jobs.

But a comprehensive report by the American Association of University Women, released last week, zeroed in on a workforce segment that, theoretically, should be on par: women and men getting their first jobs after college graduation.

The finding: Nearly the same gender gap as for the workforce at large. Young women, on average, are earning 82 percent of what their male peers are earning one year after college graduation.

Again, the choice of major and profession makes a difference. Men are more likely to be in the higher paying engineering and science fields.

But even in comparable business and management positions, women are earning less. Among business majors, for example, the survey found women earning about $38,000, on average, compared to men’s average of $45,000.

So here are the career recommendations for women who are concerned about the gap:

Don’t count on equal pay laws. Be prepared to tackle the pay issue head-on. Women’s advocacy groups say most women aren’t as aggressive about negotiating pay as men.

Don’t blindly accept the first number a prospective employer offers. Know a reasonable, competitive pay amount – that you’ve researched through your campus career office or online pay sources such as salary.com – and don’t be afraid to negotiate before you accept the job.

Studies repeatedly show that if you start out behind your male peer it can make a lifetime pay difference of tens of thousands of dollars. And that can hurt your ability to repay student loans and, eventually, your retirement pay amount.

Results: $500,000 in pregnancy discrimination case

Mr. Lamberton recently obtained a significant recovery for a client in a pregnancy
discrimination case, involving a current cash component and reinstatement offer
with a combined total cash value of more than $500,000.  The employer will also
revamp its written employment policies, and provide training to its managers on
the civil rights laws.