NEW YORK — A federal agency Monday filed a sex discrimination suit against brokerage giant Morgan Stanley Dean Witter & Co., accusing the firm of failing to fairly promote and compensate women, including a $1-million-a-year bond saleswoman fired last October.
The Equal Employment Opportunity Commission, which enforces federal job-discrimination laws, took the action in a case originally brought in November 1998 by Allison Schieffelin, 39, who claimed that she was denied a promotion because of her gender and was paid less than men of similar rank.
The EEOC also accused Morgan Stanley of firing Schieffelin in retaliation for filing the discrimination complaint.
It is the first major sex discrimination suit that the agency has brought against a Wall Street securities firm, officials said at a news conference in Manhattan on Monday.
In a year when the securities industry is reeling from collapsing stock prices and accusations of conflicts of interest on the part of brokerage analysts touting shares, the suit is another blow to Wall Street's image.
The EEOC said that Morgan Stanley's bias extended to as many as 100 other women whom it did not name but who, like Schieffelin, have worked in the firm's institutional equity division.
The brokerage excluded women from social events, including golf outings and at least one trip to Las Vegas, at which they could have furthered their careers by cementing ties with clients, according to the EEOC complaint.
Schieffelin, who earned $1.35 million in 1998 as a manager in Morgan Stanley's convertible bond department, said that despite receiving highly favorable job performance ratings she repeatedly was denied the coveted and even more lucrative position of managing director.
Morgan Stanley replied in a statement that it "flatly rejects the EEOC contentions that Schieffelin was discriminated against." The firm said she was the highest-paid salesperson on her desk and that the job she claims she was denied because of gender bias in fact went to another woman.
Schieffelin was fired, the firm said, "after she initiated an abusive confrontation with her boss--the woman who got the job she is suing for."
Schieffelin and the commission rejected the brokerage's view of events, calling it a pretext, and noting that her boss, Gay Ebers-Franckowiak, was promoted a year after Schieffelin filed her complaint.
Once Schieffelin filed her suit, she said her bosses began to freeze her out of contact with clients, disparage her to other employees and give her poor performance evaluations.
"I believe that they thought if they made my day-to-day life miserable enough, I would just go away," she said at Monday's news conference.
"Ms. Schieffelin's case underscores a long-standing, endemic problem that has plagued the securities industry for more than two decades," EEOC Chairwoman Cari Dominguez said Monday.
"Despite increasing numbers of women pursuing careers on Wall Street today, many continue to face exclusionary barriers that impede their professional growth and their advancement to the highest levels of the industry," she said.
More than 95,000 women work in the U.S. securities industry, according to a 1999 survey by the Securities Industry Assn. About 9.6% of the top-paying jobs, including investment banking and related businesses, are held by women, the association said.
"There's a pretty consistent pattern of women in the brokerage industry facing discrimination," said Paul Mollica, partner in the Chicago law firm of Meites Mulder Burger & Mollica, which represents 198 female brokerage employees at U.S. Bancorp Piper Jaffray now trying to gain class-action status for their discrimination complaint.
Merrill Lynch & Co. and rival Smith Barney, now a unit of Citigroup, in 1998 both settled high-profile gender discrimination and harassment cases involving hundreds of female employees.
A Long Island, N.Y., Smith Barney branch became notorious for a basement "boom-boom room" where male employees allegedly harassed women co-workers at raunchy parties.
To be sure, such claims abound outside the brokerage industry. Mitsubishi Motor Manufacturing of America Inc., which faces an age discrimination suit for firings at its Normal, Ill., plant, three years ago paid $34 million to more than 300 women to settle one of the largest gender discrimination cases ever filed.
But the securities industry for years was insulated from litigation on discrimination grounds because employees had been required by the New York Stock Exchange and National Assn. of Securities Dealers rules to settle such disputes through arbitration rather than in court, Mollica said.
EEOC investigates hundreds of discrimination cases but joins lawsuits in only a tiny number, he said.
In a statement at the news conference, Schieffelin described herself as so loyal she "bled Morgan Stanley blue."