Old, ugly and fired

In the latest case against Wall Street sex bias, a woman is awarded $29 million after complaining of a corporate culture hostile to females.

Published April 8, 2005 1:56PM (EDT)

When Laura Zubulake's male colleagues on Wall Street wanted to strike deals with clients they headed to the golf course, the baseball stadium and, inevitably, the strip club. Amid the machismo, Zubulake, 44, never got a look in. Her lawyers claimed that a male executive at the bank told her she was old and ugly and could not do the job. After making a complaint, she was fired.

Now her former employer, UBS, Europe's largest bank, is being forced to pay out $29 million in damages -- the latest award in a growing number of sexual discrimination lawsuits challenging the way that the world's most powerful financial center does business. It is one of the largest discrimination awards to an individual on record.

Last July, another of the big Wall Street banks, Morgan Stanley, agreed to pay $54 million to settle a discrimination suit brought by the EEOC, the U.S. employment commission, on behalf of Allison Schieffelin, a former bond trader, and 340 other women. Also last year, Merrill Lynch paid out $2.2 million to a female former broker.

Zubulake said she was "gratified and relieved" that the case she filed three years ago was over. "Do I think I'm unique?" she considered. "Probably not. I'd like this to send a message to other women on Wall Street that if they are experiencing different treatment, they should stand up and speak out, which is a difficult thing to do, believe me."

Zubulake's testimony offered insight into the secretive, clubby and often brutal world of high finance. She was hired on the Asian equities sales desk at the bank in 1999 and worked in UBS offices in Manhattan and Stamford, Conn. She initially enjoyed the job.

In her suit against the bank, though, she described how she was passed over for the job of manager on the sales desk in early 2001. The position was given to a former UBS employee, Matthew Chapin, who, she testified, went on to belittle and ridicule her in front of the rest of the office, make sexist remarks, exclude her from trips with clients and deny her important accounts. Zubulake said her desk was even placed across an aisle from the rest of the team, seating her with the office assistants.

In the complaint, she said Chapin on several occasions asked, "Does anybody like you?" in front of other workers. While looking at a C.V. for a female job candidate, he allegedly said, "I have to interview this chick ... Oh, I mean woman," and remarked that he had "yellow fever," meaning he liked Asian women. She said she was accused of insubordination while male colleagues were allowed to yell back at Chapin.

The behavior was not isolated to Chapin, she said. Written peer evaluations said she should "smile more" and be "softer." Despite her complaints, the bank allegedly took no action. The head of human resources responded by telling her she should be more "soft-spoken," the complaint said.

"It was a constant battle," Zubulake said. "It was demoralizing. I kept trying to work with them, but it was a very difficult period." Exasperated, she filed a complaint with the Equal Employment Opportunity Commission in August 2001, and was fired two months later.

Her lawyer, James Batson, said: "It is nice to see some recovery not just for gender discrimination but for retaliation. A lot of women feel that if they complain they will get fired -- that they are history. I hope this verdict will serve notice to companies that they can't do that."

The most notorious case of sex discrimination on Wall Street was brought against the firm Smith Barney in 1996; it detailed the existence of drinking parties for mainly male brokers in the firm's basement, called the "boom-boom room," where a toilet bowl hung from the ceiling.

Martha Burk, author of the book "Cult of Power; Sex Discrimination in Corporate America and What Can Be Done About It," says bad behavior on Wall Street is still pervasive. "I don't think firms have learned a thing. This trickles down from top management and creates a corporate culture that is hostile to women. It is notorious in New York that clients are taken to strip clubs."

The American Securities Industry Association said recently that more than 70 percent of all investment bankers, traders and brokers in management positions were white men. Women have yet to break through to the very top jobs. Sallie Krawcheck, chief financial officer and head of strategy at Citigroup, is arguably the most powerful. She is effectively No. 3 at the company.

An additional case against Smith Barney (now a part of Citigroup) was filed last month by four women who alleged that they were denied promotions and were paid less than male colleagues. The suit was filed with the help of the Washington-based National Council of Women's Organizations, which set up the Women on Wall Street Project last year to combat discrimination.

The initial focus of the project was to lobby financial firms whose bosses are members of the male-only Augusta Golf Club. They include the bosses of Citigroup, Morgan Stanley, American Express, Bank of America and J.P. Morgan Chase.

Burk, who works with the project, said awards need to go higher. The "$29 million won't even make a footnote to a bank. They see this as the cost of doing business. It is cheaper to pay out every five years or so than it is to fix pay disparities."

UBS argued in its defense that Zubulake had not been singled out. Chapin, defense lawyers said, had treated everyone badly. In closing statements, the lawyer for UBS, Bettina Plevan, argued that Zubulake was fired because she had "performance problems" and was not a team player.

A UBS spokesman said the bank was "disappointed" and would appeal. "We regard the amount awarded as excessive and will now move to set aside the verdict."

By David Teather

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