Citigroup Inc., the biggest U.S. bank by assets, has agreed to pay $33 million to resolve claims by female brokers at a unit of Smith Barney that the company continued to discriminate after a 1997 sexual-harassment settlement. The proposed settlement calls for as many as 2,500 current and former Smith Barney female brokers nationwide to share in the settlement and procedures to increase opportunities for women. In 2005, four female brokers in California sued in federal court alleging branch managers steered accounts to male brokers, making it harder for women to earn commissions, and retaliated when they complained.
The suit was filed eight years after Smith Barney settled claims that women in its Garden City, New York, branch were subject to crude talk and lewd antics by male employees who nicknamed their part of the workplace the “boom-boom room.” However, the brokerage unit didn’t live up to promises made in that settlement to end discrimination. The plaintiffs didn’t claim harassment, which U.S. courts have ruled is a form of bias. The women sought back pay and other damages. Female brokers who worked at Smith Barney starting in 2003 are eligible for the settlement funds, which amount to $33 million plus interest.
Smith Barney will revise the way it distributes accounts to give more weight to recent performance and ensure that walk-in clients and customers of retiring brokers are distributed fairly. The company and lawyers for the women will appoint an independent diversity monitor who will review reports of the company’s progress and employee complaints, according to the agreement. The monitor will report to the company’s chief executive officer of global wealth management. Smith Barney also agreed to post available branch management positions and provide all management personnel with diversity training. Branch manager compensation would be linked to increasing diversity, according to the agreement. The settlement is subject to court approval.
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