Few women in corporate America reach the levels that Lorene Schaefer and Theresa Metty attained. Schaefer was general counsel of General Electric’s $4.2 billion transportation business. Metty was senior vice president and chief procurement officer at Motorola, with annual compensation near $2 million.
But both women claim they hit the glass ceiling–an invisible barrier blamed for blocking women from realizing their career potential. Faced with demotion, Schaefer filed a class action lawsuit May 31, accusing GE of “systemic, company-wide discriminatory treatment” of female attorneys and managers. Passed over for promotion, demoted and subsequently terminated, Metty claimed Motorola made only “minimal effort to hire or promote women to executive positions.” She settled a sex discrimination suit for an undisclosed sum on March 8 as a jury trial was underway.
Other recent glass ceiling cases include Morgan Stanley’s $46 million settlement with
2,700 female financial advisers in April. At Costco, assistant managers who claim they were blocked from promotions won certification of a class action in January.
More than two decades after a Wall Street Journal article popularized the phrase “glass ceiling” and more than 40 years after Congress outlawed sex discrimination, litigation claiming gender disparities in promotional opportunities is on the rise.
While most women aren’t willing to risk the stigma attached to executives who sue their employers, some are stepping forward. And plaintiffs’ attorneys are stimulating interest with highly publicized mega-class actions.
“We’ve seen several cases recently of professional women taking on their employers over discrimination where a few years ago we didn’t see that,” says Sandra Jezierski, shareholder in Halleland Lewis Nilan & Johnson. “It seems women feel more empowered to bring lawsuits against their employers. When women read articles about other women doing it, it adds fuel to the fire.”
In many cases the fire is set by plaintiffs’ attorneys who know the numbers are on their side. In 2006 the women’s advocacy group Catalyst found that while 46.3 percent of U.S. employees are women, only 15.6 percent of corporate officers are women.
“Enough women have made it to the first rung of the ladder that it’s obvious to ask the question, why haven’t more gone higher?” says Brad Seligman, executive director of the Impact Fund, a legal foundation specializing in class actions, and lead attorney for the Costco plaintiffs.
The answers to that question vary, and some of them can undermine a plaintiff’s case. Some disparities can be explained by the fact that women may choose less demanding career paths or take extended leaves of absence in order to spend more time at home. At the highest levels, decision makers often base promotions on subjective factors such as “enthusiasm” and “leadership ability” that can’t be quantified, so it’s hard to show that they passed over a woman due to bias. And the discrimination is usually subtle.
“Most CEOs are male,” says Jane McFetridge, partner in Fisher & Phillips. “And people are more likely to foster and develop someone like themselves. But it’s very difficult to prove discrimination.”
Now plaintiffs’ attorneys are taking a new tact, tapping sociologists to present theories that tie such unconscious bias to discriminatory decisions.
“What we rely on now is a developing body of sociological knowledge that looks at how people make decisions,” Seligman says. “Research tells us that we are most comfortable with people like ourselves, so if you don’t have a carefully designed personnel system with accountability and oversight, the odds are you are not going to consider people [for promotion] who are different from you.”
While the 11th Circuit upheld class certification in the massive Dukes v. Wal-Mart sex discrimination class action in January based in part on testimony from sociologists about unconscious bias, few courts have ruled on the theory.
“Plaintiffs’ attorneys are relying on unconscious bias theory at the class-certification stage to show a common thread that ties together hundreds of employment decisions,” says Jeremy Sosna, partner in Ford & Harrison. “The proverbial jury is still out on whether that is a viable way to prove discrimination.”
Litigating on the defense side of glass ceiling cases isn’t easy either. In companies where women are underrepresented in management and plaintiffs show a pattern of apparently qualified women losing out on promotions to men, “I have to explain how that statistical anomaly transpired,” McFetridge says.
The defense case is hampered if the company can’t produce annual reviews or other documentation that differentiates the candidates, she adds.
Companies also are sometimes tripped up by gender stereotypes.
“There aren’t a lot of companies that intentionally exclude women from executive jobs, but there could be stereotypes of what an executive should look like,” Jezierski says. “They expect the CEO to be a bulldog, and they just can’t see a woman in that role.”
Beyond that, while most companies have corporatewide anti-bias policies, many promotion and pay decisions are made in far-flung divisions or work groups that may not get the message.
“At the corporate level, you have very sophisticated human resources people whose focus is to eliminate bias,” Sosna says. “But because of the decentralized nature of many companies, it’s very difficult to impose that corporate culture.”
While Seligman agrees that many companies are working to address glass-ceiling issues, he predicts an increase in sex discrimination class actions, especially if Dukes survives the next round of appeals. The case will become a prototype that plaintiffs’ attorneys can follow.
“It won’t be an avalanche because class litigation is complex and difficult, but you will see an increase in targeted cases,” he says.
To avoid being the next target, employers must back up fair policies with sound personnel practices at all levels. That includes posting promotion opportunities, writing detailed job descriptions and requiring candid reviews. Putting promotion decisions in the hands of a diverse team also minimizes claims.
“Companies need to look at promotion practices–not just the policies but how the policies are implemented,” Jezierski says. She also recommends examining pay rates for men and women at all levels and detailing job duties that impact pay in job descriptions, even though the Supreme Court recently made it more difficult to claim pay discrimination.
Cathy Fleming, partner at Nixon Peabody and president of the National Association of Women Lawyers, suggests that in-house lawyers serve as role models for the rest of the corporation. Legal departments at Wal-Mart, Sara Lee and Pepsi are doing just that by embracing diversity in hiring and promotion and supporting women lawyers with training opportunities, she says.
“Embracing the concept of diversity has to come from management down,” Fleming says. “Management has to say it is an important goal.”