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Thu, Jul 08, 2004 - Page 12 News List

Morgan Stanley in court over discrimination case

HARASSMENT The lawsuit focuses on salary and promotion issues and claims women are subjected to groping, slaps on the buttocks and other office antics


Wall Street brokerage Morgan Stanley was set to defend itself yesterday against claims it denied women promotions, allowed sexual groping, office strip shows and other forms of sexual discrimination.

Deep-pocketed Wall Street firms have rarely been brought to trial for sexual discrimination and the suit marks the first such case against a brokerage brought to trial by the US Equal Employment Opportunity Commission.

The case is reminiscent of the notorious "Boom-Boom Room" allegations against Smith Barney, now a unit of Citigroup Inc. That case, settled in 1997, included accusations women were harassed and intimidated by male workers who engaged in fraternity-house antics at what was known as the "Boom-Boom Room" at the firm's Long Island, New York, branch.

Following that case, New York's then attorney general held a public hearing on sexual discrimination on Wall Street where women complained of groping, co-workers exposing their penises and threats of physical violence.

The suit against Morgan Stanley was filed on Sept. 10, 2001. It focuses on salary and promotion issues and says women are still subjected to groping, slaps on the buttocks and a range of unacceptable office antics including striptease shows and breast-shaped birthday cakes.

Jury selection in Manhattan federal court was set to be completed yesterday with opening statements to follow.

Discrimination lawyers say the suit shows the securities industry, despite a flood of negative publicity, still lags in the field of gender equality.

"Wall Street still believes that women are inferior, that men are better, more competent ... more interested in advancing their careers," said Linda Friedman, a Chicago lawyer specializing in discrimination. "They have made strides, but there is still an enormous amount of work to be done."

Morgan Stanley, one of the US' largest securities firms, could face tens of millions of dollars in damages if found liable.

The case, brought on behalf of more than 300 women who have worked in the firm's institutional-equities division since 1995, will likely last about three weeks.

The firm denies wrongdoing and says it is committed to providing a bias-free workplace.

The trial comes at a time when discrimination litigation is a growing concern of corporate America.

Last month, a federal judge ruled the largest workplace bias lawsuit in US history could proceed as a class-action against Wal-Mart Stores Inc, the world's largest retailer.

On Tuesday, Wal-Mart asked a federal appeals court to review that ruling -- which gave representation to as many as 1.6 million of current and former women employees of the company.

The lawsuit alleges the retail giant set up a system that frequently pays its female workers less than their male counterparts for comparable jobs and bypasses them for promotions.

Arkansas-based Wal-Mart, the largest private employer in the US, said the company's 3,500 stores do not follow a policy discriminating against women, and said the class is so large that it is "unmanageable."

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