New Jersey Enterpreneur - Small Business, Entrepreneurs and Venture Capital

Update on Sexual Harassment and Sex Discrimination Settlements and Verdicts: Laws Affecting Women - 2005

Women who work in New Jersey benefit from numerous state and federal laws that protect them against harassment and discrimination in the workplace.

New Jersey state law also protects women against sex discrimination and sexual harassment under New Jersey?s Law Against Discrimination (NJ LAD). In addition to the NJ LAD, New Jersey also has its own version of the Equal Pay Act. In 1952, New Jersey?s Wage and Hour Law was amended to specifically prohibit sex-based discrimination by employers in the rate or method of payment of wages to employees. This amendment to New Jersey?s Wage and Hour Law provided the initial equal pay protections as, although the NJ LAD was initially enacted in 1945, it was not amended to include a provision prohibiting discrimination on the basis of sex until 1970.

The NJ LAD also protects against discrimination on the basis of sexual orientation, marital status, familial status and was just amended to include protections on the basis of domestic partnership status. If a woman is discriminated against on the basis of pregnancy, she may invoke the protections under the NJ LAD?s provision regarding sex discrimination, as well as potentially under New Jersey LAD?s handicap discrimination section in the event that the pregnancy meets the definition of a handicap. New Jersey also has its own Family Leave Act, enacted in 1989, which protects women?s jobs when they have to take time off, including, for the birth or adoption of a child, or for having to care for a child, spouse or other qualified relative with a serious medical condition.

When it comes to some sizable sex discrimination verdicts or settlements, corporate America, and particularly some large companies on Wall Street are feeling the effects. During the Summer of 2005, an arbitration panel ruled that Merrill Lynch must rehire Hydie Sumner, a former Merrill Lynch financial consultant who sued the Wall Street Company for sex discrimination and had previously been awarded $2.2 million. An arbitration panel originally awarded Ms. Sumner the $2.2 million last April 2004 for back wages and future lost wages; however, Merrill Lynch did not pay that amount as it was awaiting the arbitration panel?s decision on whether Ms. Sumner had to be rehired by Merrill Lynch. The arbitration panel not only just recently ruled that Merrill Lynch must rehire Ms. Sumner, but also that it must pay her $303,000 in lost back wages.

While it was expected that Merrill intended to appeal the panel?s decision on reinstatement, according to the attorney for Ms. Sumner, Linda D. Friedman (Stowell & Friedman, Chicago, Illinois) not only is Merrill not appealing, but the Company has agreed to accelerate Ms. Sumner?s status directly to that of Sales Manager. Ms. Sumner will not only return to work at Merrill, but the acceleration of her managerial status means that she will not have to go through the management assessment program -- the very program in which she fought to participate.

Out of the numerous sex discrimination claims filed against Merrill by Ms. Friedman?s firm, most have settled, resulting in an amount of well in excess of $100 million dollars. Other than Ms. Sumner?s case, there are 6 more set for arbitration this coming year. Of great interest is the arbitration of the claims filed by the mother/daughter team of Valerie and Janine Craane, which is scheduled in January, 2006 in New York City. The Craanes control approximately $1 billion dollars in assets in connection with Merrill?s international business. The litigation of their claims undoubtedly will spark a great deal of interest not only in the general business community but within the Merrill organization.

Also of great interest recently was news that Morgan Stanley, one of the world?s biggest security firms, which last year agreed to pay $54 million to settle a sex discrimination suit brought jointly by a former bond sales women, Allison Schieffelin, and the United States Equal Employment Opportunity Commission, just paid out the settlement monies to approximately 67 women.. Pursuant to the settlement agreement, $12 million went to Ms. Schieffelin, $2 million was required to be spent by Morgan Stanley on diversity efforts and $40 million has been divided among the approximate 67 women who filed successful claims. The suit settled last year on the day that it was scheduled to begin trial in New York Federal Court and is the second largest EEOC settlement of a sex discrimination suit, second only to the 1997 settlement with Publix Supermarkets, Inc. for $81.5 million. Senior Trial Attorney with the EEOC?s New York District Office, Kam S. Wong, commented that the EEOC believes that the settlement sent a message to Wall Street that it must continue to re-examine its practices and remain vigilant with respect to preventing sex discrimination. Ms. Wong also commented that both the EEOC and the class of women were satisfied with the result.

In or about September 2005, the EEOC also filed a sex discrimination suit against Newman University on behalf of former Admissions Dean, Marla Sexson. The University is alleged to have failed to promote Ms. Sexson on the basis of her gender and retaliated against her after she complained about the University?s conduct. Also, reported in recent EEOC news, in September 2005, it was reported that a former Suffolk District Attorney Cameron Kenny is moving forward in a suit claiming a “pattern and practice” of gender discrimination against female prosecutors.

Another major potential class action that is currently receiving a good deal of media attention this past summer 2005 is the gender discrimination against Wal-Mart. The attempted class contemplates 1.5 million women who claim that they did not receive promotions and/or were treated less favorably than their male counterparts, including, with respect to compensation. A federal appeals court will soon decide whether or not to certify the class, which, if certified, will proceed as a massive class action. However, an appeal to the United States Supreme Court is expected regardless of which way the federal appeals court rules.

In September 2005, a San Antonio, Texas jury awarded Yolanda Olivarri nearly $5 million dollars in a sexual harassment suit against her former employer of 23 years, C-P-S Energy, and her former supervisor, Alex Villafranco. Jurors found Ms. Olivarri, a former utility meter reader with C-P-S Energy, was a victim of sexual harassment at the hands of her supervisor and that C-P-S Energy did little to help her. Olivarri alleges that, beginning in late 2000 until early 2003, her former supervisor, made unwelcome sexual advances, including remarks and inappropriate touching. The conduct only stopped when she was transferred to another department. Jurors determined that C-P-S Energy should pay up to $2 million to Olivarri, and Villafranco was ordered to pay the rest in punitive damages. C-P-S Energy spokesman Bob McCullough says the company still believes it took appropriate action when the allegations first surfaced and plans to file an appeal.

A Swedish court on Wednesday, September 21, 2005 convicted Volvo Cars of gender discrimination for denying a woman a job at its manufacturing plant because of a 5 foot 4 inch height requirement to work at the conveyor belt. The woman who filed the claim was only 5 feet 3 inches and argued that the height requirement did not serve a business necessity and had a desperate impact on women.

In addition to the above, in the past year, there was a major sexual (and sexual orientation) harassment verdict returned in New Jersey state court. The matter was brought by Karen Caggiano (a former sheriff?s officer) against the Essex County Sheriff?s Office and numerous Essex County officials. In late 2004, a jury returned a multi-million dollar award against the defendants for economic, compensatory, and punitive damages. In May 2005, a New Jersey Superior Court Judge awarded the plaintiff?s attorney a $1.6 million dollar fee, bringing the County?s financial obligations up to approximately $5.8 million dollars. The County is expected to appeal.

Kirsten Scheurer Branigan is an attorney with the law firm of Wilentz, Goldman & Spitzer (a 145+ attorney firm) who practices in the area of employment law and litigation.