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Downturn fuels surge in = claims of sex=20 bias

Tara Loader = Wilkinson
16 Feb=20 2009

Discrimination cases are rising as more women = are=20 prepared to sue their employers

=E2=80=A2

What = to do=20 if you suffer discrimination 16 Feb 2009 =

=E2=80=A2

Defendi= ng=20 a claim of sexism 16 Feb 2009=20

=20 Women believe their gender makes it harder to=20 succeed
= View=20 graphic=20

It is=20 hard to think of anything less politically correct than a private equity = firm=20 hosting a men-only shopping evening for clients in a sexy lingerie = store.=20 Particularly when the buyout firm in question is chaired by a woman, and = the=20 event was due to be held in the same week the UK Minister for Equality = warned=20 City of London banks to get their act together on gender=20 equality.

So it is perhaps not surprising that 3i, the = firm in=20 question, was forced last week to cancel its proposed = pre-Valentine=E2=80=99s Day soir=C3=A9e=20 at Agent=20 Provocateur, the upmarket lingerie retailer which it owns. =

The faux=20 pas showed that sex is never far from the surface in the City and the = industry=20 has a long way to go in terms of diversity and equality. With tens of = thousands=20 of bankers and brokers facing redundancy in the worst downturn since the = 1930s,=20 employment lawyers and diversity specialists are warning of a surge in = the=20 number of women likely to resort to legal action for alleged = discrimination.=20
= Jane=20 Mann, partner and head of employment at law firm Fox=20 Williams, said: =E2=80=9CFor me, the first sign of the credit crunch = was a pile of=20 sex discrimination cases landing on my desk.=E2=80=9D

Henry = Clinton-Davis, head=20 of employment law at Arnold=20 & Porter and member of the management committee of the = Employment=20 Lawyers Association, said he had noticed at least a 10% rise in the = number of=20 sex discrimination tribunals in the past year. However, Phillip Landau,=20 employment law solicitor at Landau Zeffertt Weir, thought the figure = might be=20 higher. He said: =E2=80=9CI have seen an increase of about 25% in the = nature of the=20 enquires I have received where women are questioning their selection = within the=20 redundancy process.=E2=80=9D

Government statistics released last = month showed=20 twice as many women in the UK are being made redundant as men =E2=80=93 = triggering a=20 surge in discrimination cases, which rose 26% from 2007 to 2008, = according to=20 the Advisory, Conciliation and Arbitration Service. While specific = figures for=20 the securities industry are unavailable, UK Equality Minister Harriet Harman = last week=20 warned banks not to use the economic crisis as an excuse to lay off=20 disproportionate numbers of female staff.

Historically, = recessions have=20 triggered an increase in employment tribunals. In the downturn of 1991, = when=20 more than 600,000 jobs were lost, there was a 57% rise in employment = tribunals=20 on the previous year, according to the Department for Business, = Enterprise &=20 Regulatory Reform. With at least 62,000 City jobs expected to go during = the=20 recession, according to the Centre=20 for Economics and Business Research, employment lawyers could be = busy.=20

The City has always had a poor reputation for equality =E2=80=93 = only 5% of City=20 managing directors are female, the lowest of any area or industry in the = UK,=20 according to Ruth Sealy = of the=20 International Centre for Women Business Leaders at Cranfield=20 School of Management, despite the fact they make up 62% of the = banking=20 workforce, according to the British=20 Bankers=E2=80=99 Association. According to a Financial News = survey of 1,350=20 women working in finance last October, nearly 60% believed their gender = made it=20 harder for them to succeed. The downturn has raised concerns that = advances made=20 in the area of diversity could be wiped out.

Nicki Gilmour, = founder of=20 New York-based women=E2=80=99s advisory website The Glass Hammer, said: = =E2=80=9CThis is not a=20 gender war, it=E2=80=99s an economic crisis. But inevitably, with fewer = women to start=20 with, diversity is taking a big hit.=E2=80=9D

Separately, most = banks approached=20 by Financial News last year as part of a survey on diversity = declined to=20 participate =E2=80=93 despite having done so the year before. Legal = action is rising for=20 two main reasons, say lawyers. First, there will be more cases of = discrimination=20 as predominantly male managers make bad decisions about whom to lay off. = Second,=20 some women may feel they have less to lose in taking action. =

Several=20 cases have pointed towards both trends. Last month, former banker Mona = Awad said=20 she was suing her former employer HBOS for = =C2=A316.7m=20 (=E2=82=AC19m) after her boss allegedly accused her of sleeping her way = to the top. In=20 November, two sisters won an estimated =C2=A310m out of court settlement = from their=20 former employer, broker Traditio= n.=20

The record sum for a sex discrimination case was awarded last = April to=20 City lawyer Gill Switalski who sued her former employer, asset manager = F&C= , for=20 =C2=A319m. However, this has since been successfully appealed and is = being further=20 examined after evidence came to light suggesting Switalski had applied = for =E2=80=93 and=20 been accepted for =E2=80=93 a new job while she was on sick = leave.

The growth in=20 =E2=80=9Creal=E2=80=9D discrimination is being seen in instances where = male managers revert to=20 type. For example, they might sack a woman instead of a man because the = man is=20 more likely to be the sole family breadwinner, according to one lawyer. = Mann=20 said: =E2=80=9CThere have been some complaints about stressed bosses = being overly=20 aggressive. Also, in tough times people tend to flock together for = solidarity =E2=80=93=20 often at the exclusion of others.=E2=80=9D

Anna Sofat, founder = and chief=20 executive of Addidi, an independent financial adviser aimed at = high-profile=20 women, said: =E2=80=9CRecently I have come across two cases where the = women came back=20 from maternity leave to jobs in law and finance, and found they had been = made=20 redundant. Now, with all the cutbacks, if an employer wants to lay you = off, it=E2=80=99s=20 easy for them to do so on grounds of financial = necessity.=E2=80=9D

So far, the=20 evidence for more discrimination is limited. John Philpott, the = Chartered=20 Institute of Personnel and Development=E2=80=99s chief economist and = public policy=20 director, said: =E2=80=9CWhile one cannot yet rule out the possibility = that women will=20 lose out relative to men in the jobs stakes as the recession unfolds, = this is=20 categorically not true of the jobs downturn to date.=E2=80=9D =

Instead, some=20 lawyers argue it could be the other way round, with banks going to = extremes to=20 avoid making women redundant and risk legal action. The growth in = =E2=80=9Cfake=E2=80=9D=20 discrimination claims could come as more women are facing redundancy and = see it=20 as an opportunity.

Clinton-Davis said: =E2=80=9CSometimes = claimants will have=20 considered suing for a while, but have been too nervous about losing = their jobs=20 and reputations. There are also those who view the recession as a chance = to make=20 a fast buck.=E2=80=9D One disincentive for taking legal action is that = high-profile=20 press coverage can make it difficult for women to seek employment = afterwards.=20 With the boom in banking over for perhaps the next decade, this obstacle = is=20 removed.

Looking ahead, Clinton-Davis believes sex = discrimination claims=20 and unfair dismissal cases will continue to grow. He said: =E2=80=9CThe = UK and Europe=20 are moving towards the US model of the compensation culture. The greater = ease of=20 dialogue through online networking means employees have a greater sense = of their=20 rights and higher expectations of their firm.=E2=80=9D

The issue = also has=20 political backing in the US. The White House is sending strong signals = of its=20 intolerance for sex discrimination. The first bill Barack=20 Obama signed in office was the Lilly Ledbetter Fair Pay Restoration = Act,=20 which bolsters women workers=E2=80=99 ability to sue for wage = discrimination. With=20 Obama=E2=80=99s stamp of approval, it seems sex discrimination cases are = here to stay.=20

Gilmour said: =E2=80=9CThere are a few progressive firms like Goldman=20 Sachs and PricewaterhouseCoopers,=20 which stick to their diversity policies, credit crunch or not. Those = firms will=20 be rewarded in the long run, when the bloodbath is over and they still = have top=20 diverse management in place.=E2=80=9D

=E2=80=A2 Pregnancy, = race, religion and=20 bullying have figured in some notable hearings

2009 (ongoing) = Awad v=20 HBOS

Former banker Mona Awad is taking her former employer HBOS = to court=20 for =C2=A316.7m (=E2=82=AC19m) for alleged sexual, racial and religious=20 discrimination.

2008 (ongoing) Switalski v F&C

The = record sum=20 for a sex discrimination case in the UK was awarded last April to City = lawyer=20 Gill Switalski who sued her former employer, asset manager F&C, for = =C2=A319m.=20 However, this has since been repealed and is now being re-examined after = evidence came to light suggesting Switalski had applied for =E2=80=93 = and been accepted=20 for =E2=80=93 a new job while she was on sick leave.

2008 Fariad = & Fariad v=20 Tradition Securities and Futures

Twin sisters Samira and Hanan = Fariad=20 took Tradition Securities and Futures to an employment tribunal on a = series of=20 allegations, but they reached an out-of-court settlement.

2006 = Green v=20 Nomura<= BR>
Helen=20 Green was awarded =C2=A3800,000 from her employer Deutsche=20 Bank after her claim of bullying and harassment at work was backed = by the=20 courts.

2005 Zubulake v UBS
UBS=20 agreed to pay $29m (=E2=82=AC22.5m) to Laura=20 Zubulake, who had worked on its Asian equities sales desk in the US, = one of=20 the biggest discrimination awards to an individual on = record.

2004=20 Schieffelin v Morgan=20 Stanley

Morgan Stanley settled for $54m in the case of a = former bond=20 saleswoman and 340 female employees in its institutional equities = division. The=20 charges were sex discrimination, including paying women lower wages than = men,=20 giving them fewer promotions and wrongfully terminating a = woman=E2=80=99s employment=20 when she filed a complaint.

2004 Villalba v Merrill=20 Lynch

Stephanie=20 Villalba, a former executive at the London offices of Merrill Lynch, = in 2004=20 filed a =C2=A37.5m sex discrimination case against the bank, the biggest = claim heard=20 by an employment tribunal in the UK. She claimed she had been = =E2=80=9Cbullied,=20 belittled, undermined and underpaid=E2=80=9D by her male superior. She = lost the case of=20 sex discrimination although she won a victory on the grounds of unfair=20 dismissal, for which she was compensated =C2=A355,000.

2002 Bower = v Schroder=20 Salomon Smith Barney

Julie=20 Bower who was dismissed as a City analyst at Schroder Salomon Smith = Barney,=20 was awarded =C2=A31.4m in damages. A note from her boss has summed up = her career as:=20 =E2=80=9CHad cancer, been a pain, now pregnant.=E2=80=9D

2001 = (ongoing) Madarassy v=20 Nomura

Andrea=20 Madarassy first lodged her =C2=A31m claim against Nomura for sex = discrimination=20 in 2001, but since she lost the case in 2007, she has vowed to take it = to the=20 European courts. Madarassy alleged that during her pregnancy her former = boss=20 shouted repeatedly at her for going to the toilet or for a drink of = water. She=20 also claimed her bonus was unfairly lower than that of her 17 male = colleagues=20 because of periodic absences due to morning sickness. =

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