NOW has condemned the industry-wide practice of mandatory arbitration as a way for employers to evade stricter civil rights laws enacted in 1991, and actively supported the lawsuit against Smith Barney, naming the company a Merchant of Shame in our Women-Friendly Workplace Campaign. NOW will closely monitor Smith Barney's efforts to enforce the terms of the settlement. And our activists will continue to demand that the Securities and Exchange Commission follow a proposed NASD rule change, thereby eliminating mandatory arbitration of all employment discrimination claims on Wall Street. In an affidavit to the court, Ireland outlined NOW's national position on the proposed Smith Barney settlement. The following italicized quotes are direct excerpts from that affidavit:
• After meeting with several of the class representatives and their counsel and reading the settlement, it appears that the risks of litigation have been properly considered and that the named women plaintiffs and their attorneys "have negotiated a ground-breaking and fair settlement which will substantially advance the interest of women at Smith Barney and, by its example, in the securities industry as a whole."
• If the court had certified this lawsuit as a class action at all, it would likely have ruled that the suit would benefit a much narrower class of workers, possibly only women brokers. The settlement, in contrast, covers all employees at all levels in Smith Barney. "Many of the women who face sexual harassment are non-professional or lower paid employees in clerical jobs. Often they do not bring sexual harassment claims because of both the cost of litigation and the fear of challenging their employer. These obstacles are only amplified by the mandatory arbitration requirement imposed on almost all Smith Barney employees."
• Even if the jury in the first phase of the trial decided in the women's favor on the question of Smith Barney's liability, the determination of their individual damages in the second phase would likely have been made by an appointed special master, not the jury. Unlike the federal Equal Employment Opportunity law, the proposed settlement provides unlimited punitive and emotional distress damages, therefore, "under the settlement, a woman will have the opportunity to be fully compensated for her damages."
• NOW is confident in the appointment of longtime equal rights ally
Dr. Johnetta Cole
as independent diversity advisor to the firm. We believe "the proposed
Diversity Program has the potential to result in real and immediate benefits
to women and people of color at Smith Barney and to make opportunities
available to women and minorities on an unprecedented scale."