The costs from the “boom-boom room” culture at Smith Barney are really starting to add up. After settling a sexual discrimination lawsuit in 1997, the Citigroup unit has agreed to settle again. This time it’s ponying up $33 million to settle claims from some 2,500 current and former female brokers that the company discriminated against them.
The original complaint was filed in March 2005 by four female brokers who accused Smith Barney of preventing them from competing fairly for new accounts, promotions and pay, and of depriving women of equal training and sales support.
They also accused Smith Barney of using past performance as a means to award business and pay–putting women who’d already been discriminated against at a disadvantage.
The settlement, which was filed on Thursday, also requires the largest U.S. bank to change how it awards bonuses and assigns accounts, and to adopt measures to help retain and promote women, according to papers filed Wednesday with the U.S. District Court in San Francisco. The settlement is for four years and provides compensation for all women employed as financial advisors in the U.S. branches of the company’s brokerage division from Aug. 24, 2003 through March 1, 2008, or in California from June 25, 2003 through March 1, 2008, which is expected to be close to 2,500 women.
Smith Barney 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. It will also 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.