OTI Online
winter 1995

The Big Chill
by Marlene C. Piturro

Legal secretary Rena Weeks was astonished when a jury awarded her $7.1 million dollars for being forced to endure the gropings of Martin Greenstein, a partner at the world's largest law firm, Chicago-based Baker & McKenzie. Weeks and her lawyer had sought only $3.5 million. But several jurors, assessing the firm's net profit of $65 million, felt that ten percent of the company's capital was a fitting penalty.

The high jury award made national headlines in September 1994. But there's likely to be much less publicity later on when the appeals judge, inevitably, cuts the award down to something that won't make much of a difference to the company's bottom line and leaves Weeks feeling cheated.

In 1991, for example, Texaco got a wake-up call about sex discrimination from a jury that awarded Janella Martin, a credit supervisor, $5.3 million in lost wages and $15 million in punitive damages. Martin, who handled over $2.5 billion of barge and refinery-related transactions every year for Texaco, was verbally promised a promotion to manager if she moved from Houston to Los Angeles. But after relocating, she saw a male outsider promoted instead. When she sued for sex discrimination, Martin claims she was threatened by a manager who said: "When you're walking down an alley one night, you'll get a tap on the shoulder and you'll have an accident."The jury foreman, Rod Hoard, explained the high punitive damages: "We wanted to set an example against Texaco, and if we gave one million dollars, it would be like one dollar to them." But two years after the highly publicized award, Judge Ronald Cappai threw out the verdict on appeal, saying Martin's damages should be limited to $150,000. "An inflamed jury allowed their passions to get the better of them," Cappai intoned. A higher court upheld Cappai, so Martin and Texaco will face off in a second trial.

Martin is among a small band of discrimination fighters whose hard-fought and well-publicized court victories have helped make the workplace more equitable for women employees. Over the last few decades, lawsuits have forced companies to make fundamental changes. In the insurance industry, women can now escape the secretarial ghetto and become sales agents because in 1979, Muriel Kreshevsky spearheaded a $200 million victory on behalf of 900 secretaries denied advancement opportunities by State Farm Insurance. Some women can now become firefighters because in the early 80s Brenda Berkman sued to be the first female fire fighter in the New York City Fire Department, a force of 10,000. Companies need to be careful about making women the "last hired and first fired," even in recessionary times, because 48-year-old Bernice Stanfill of DelMar, California, proved breach of contract and sex discrimination against her employer. Science Applications International Corporation (SAIC), and won a jury award of $3.1 million.

And shaping career paths to fit the needs of women with children received a boost recently when Cynthia Fisher, an assistant biology professor, successfully suedVassar College for paying her less then peers and failing to grant her tenure because she took eight years off to raise her kids before her Vassar employment. Federal Judge Constance Baker Motley ruled for Fisher: "The persistent fixation of the Biology Department's senior faculty on a married woman's pre-Vassar family choices reflects the acceptance of a stereotype and bias: that a woman with an active and ongoing family life cannot be a productive scientist."

But advances won through the courts are now being threatened. Women who win lawsuits against employers who discriminated and harassed them are finding that the battle doesn't always end with a big bang and cash in hand. Corporate heavyweights such as Ford Motor Company, AT&T, Pfizer, Texaco, and Exxon have caught on to what lawsuits cost them monetarily and in bad publicity, and have banded together to clip plaintiffs' wings. Forming a coalition called the Civil Justice Reform Group, these Fortune 100 firms are dedicated to stopping plaintiffs now. Under the guise of tort reform ("tort" is the term for a lawsuit in which an injured person tries to recover money for economic damages or non-economic damages such as pain and suffering), they have succeeded at capping punitive damages at $300,000 in federal courts. Now they are waging and winning state-by-state campaigns. All but a handful of states - Colorado, Oklahoma, Nebraska, Alabama, Georgia, Florida, and Louisiana - cap or bar punitive damages. Take away punitive damages and the possibility of a substantial settlement evaporates, not only for plaintiffs but for the few attorneys specializing in employment practice law not already on corporate payrolls or retainer.

This well-financed effort to stop anti-discrimination lawsuits began with a war chest based on initial corporate contributions of up to $100,000 that were funneled into research and lobbying. For instance,Texaco sponsored a study by the Washington Legal Foundation showing that punitive damages awards against businesses in five large states went from $1.1 million in 19681971 to $343 million in 1988-1991. The study did not separate out product liability suits, which generate the biggest awards. Anita Larsen, a Texaco spokesperson says that "lawsuits suck the lifeblood out of a corporation's bottom line."

The pressure to curb big awards has made it increasingly unlikely that a woman who has been discriminated against or harassed at work will prove her case and be compensated. Jerry Leaphart, an attorney practicing in Ridgefield, Conn, after 17 years in a Fortune 100 company, spells out what corporate tort reform efforts signal: "The pendulum is swinging away from employees seeking reasonable redress under the Civil Rights Act of 1964 and its amendments prohibiting discrimination on the basis of overt characteristics including age, race, and gender." Leaphart describes the many obstacles large corporations now throw in a plaintiff's path: having new hires waive the right to sue in employment contracts; watering down affirmative action plans in company handbooks by describing them as "a guide and suggestive but not binding"; retaining all the lawyers and expert witnesses specializing in employment practice in the location where a trial will take place; petitioning the Securities Exchange Commission to remove non-economic issues such as discrimination from a company's annual filing; "swarming," and other delaying tactics such as excessive discovery time which add years to a case; and "scorched earth" tactics involving litigation to the plaintiff's last breath.

Abby Liebman, an attorney from the California Women's Law Center, sounds the alarm for what corporate pushes for tort reform may mean. "You need an award significant enough that very large companies will pay attention. Sometimes smaller damage awards are looked on as fines, and the companies will just keep discriminating."

Without timely resolution of lawsuits, workplace discrimination claims its victims slowly and deliberately, particularly when the employer will stop at nothing to silence an employee turned plaintiff/traitor. The result can be years of intense frustration for the plaintiff. In 1988 Charles Koster watched his daughter's mental and physical health deteriorate during a protracted sexual harassment case against the bank that employed her. When presiding Judge Richard Daronco set aside the jury's $2.5 million verdict for Koster's daughter, the father shot and killed Daronco, then himself.

How many women will be willing to risk the years of frustration involved in a lawsuit when they realize that judges are likely to turn large jury awards into pennies?

Sixty-year-old Catherine Malarkey, an executive secretary, was derailed from the fast track after pointing out in a memo to Texaco higher-ups that executives were discriminating against veteran women workers because of their desire to have young secretaries. She fought - and won - a 14_year battle with the firm, but the result was only a $130,000 award plus legal fees. Texaco has been enjoined from retaliating against her, but Malarkey finds herself threatened again by a poor performance review and is forced to ponder the hundreds of thousands of dollars needed to drag Texaco to court again.

Watching a recent round of 2,500 layoffs at Texaco, Malarkey sees many of the outcasts close to the edge mentally, physically, and financially. She says: "The fear and stress levels of employees today is sickening. My way to fight discrimination was a lawsuit but too many others are afraid they will lose the pittance that the company gives them at termination. There are many women hurting and suffering, and if there is no way for them to win a large dollar award, corporations will get away with everything they can."

Discrimination gets easier in hard times, and federally-protected Equal Employment Opportunity rights may get smashed on the rocky shoals of corporate downsizing, recession, and burnout. Who will be brave and resourceful enough to go to the toothless Equal Employment Opportunity Commission or to hire an attorney when the unemployed look at them with envy? But long range, companies that continue to permit discrimination and harassment may be shooting themselves in the foot. Workforce 2000, a study by the Hudson Institute for the U.S. Department of Labor, estimates that 85 percent of the 26 million net new American workers in this decade will be women, members of minority groups, and/or immigrants. Companies that refuse to share power and money with those considered "inferior" may soon find themselves with a mediocre work force and unable to compete with forward-looking companies that can choose and promote from the more vast and diversified pool of talented people.

Necessity can bring about a quantum change of mindset. Maybe Gary Brouse, director of equality programs at the Interfaith Center for Corporate Responsibility, a Manhattan-based consulting and investment organization, is the herald of transformation. In a "Mr. Smith Goes to Exxon" scenario, Brouse suggests that discrimination will be abolished when "the CEO has a change of heart and realizes that discrimination is unconscionable. He will then make it clear that discrimination will not be tolerated." Brouse says that executives at large companies such as Con Edison, Hoechst, and A&P have already made such about-faces for enlightened self-interest.

Fighting efforts to take the teeth out of jury awards allows victims of harassment and discrimination their constitutionally-guaranteed day in court. And high monetary awards force corporations to realize that gender bias can be unprofitable, as well as unconscionable.


Marlene C.Piturro is a free-lance business journalist. She Hues in Hastings-on-Hitdson, New York.


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