In a dreamy, amber-filtered television commercial, Coline Jenkins-Sahlin, the great-great-granddaughter of the famous American suffragist Elizabeth Cady Stanton, strolls down an autumnal path, talking about how she found resonance with a woman broker at Merrill Lynch. At the end of the TV spot, Jenkins-Sahlin recalls the words of that other great suffragist, Susan B. Anthony: "A woman must have a purse of her own." Merrill Lynch, the ad implies, is a champion of women.
"I was so angry when I saw it," says Nancy Thomas, a broker who had worked for Merrill Lynch for more than 17 years and was one of the original eight women who filed suit against the company in 1996 for sex discrimination. "I wanted to call up Stanton's granddaughter and ask her what she thought she was doing." In 1998 the company agreed to settle the class action by mediating each claim individually, and more than 900 women--nearly a third of Merrill's female brokers--joined the class. But by the time the commercial started airing in March of this year, the company hadn't even begun mediation with most of the original plaintiffs.
Elizabeth Cady Stanton agitated not only for the vote but for greater economic rights for women. The Woman's Rights Convention in Seneca Falls, New York, in 1848, which she helped organize, ratified the Declaration of Sentiments that proclaimed:
The history of mankind is a history of repeated injuries and usurpations on the part of man toward woman, having in direct object the establishment of an absolute tyranny over her.... He closes against her all the avenues of wealth and distinction which he considers most honorable to himself.... He has endeavored, in every way that he could, to destroy her confidence in her own powers, to lessen her self-respect, and to make her willing to lead a dependent and abject life.
The charges in the Merrill Lynch lawsuit echo the declaration made 150 years ago. The company, the complaint reads, "engaged in a pattern and practice of discriminatory conduct including, but not limited to ... systematically paying women lower wages and/or denying women opportunities to increase their earnings, including commissions; negligently hiring and/or retaining men with known propensities to discriminate against or sexually harass women; creating an environment that is hostile and offensive to women"; and a list of other abuses.
The plaintiffs in the Merrill Lynch suit see themselves as modern-day Stantons. "We're the angry ones; we're the aggressive ones; we're the ones who took Merrill Lynch on," says Anne Marie Kearney, formerly a broker in the company's San Antonio office and one of the original eight plaintiffs.
Kearney herself claims she was asked in her job interview with Steve McAnally, a former Merrill resident vice president in San Antonio, how much money her husband made. After she reluctantly told him, she claims he said, "We won't have to pay you so much then because you won't starve." At the time, Kearney was a 45-year-old with an MBA and 15 years of experience working in major corporations. Eventually, she found out she was being paid 30 percent less than men who had recently graduated from college. She complained and a year later was fired--for other reasons, the company says. (McAnally, who retired from the company in 1998, declined to comment for this article.)
Arthur Borham, resident manager of the Coral Springs, Florida, office took much the same approach, according to the lawsuit. "You don't need the money because you have a rich husband," he told broker Alice Moss, another of the eight original plaintiffs. "As with the other female brokers in the office, Merrill Lynch failed to direct large and desirable accounts from departing brokers to Moss while routinely directing such accounts to male brokers," the complaint alleges. Moss called the confidential employee hotline to say her boss was pressuring her to quit, and 10 minutes later, she says, he called her in and fired her. Her book of accounts worth $45 million was divided up among the predominantly male brokers in her office. (Called for a comment for this article, Borham said, "Didn't my secretary tell you I wasn't interested?" and hung up.)
An old boy network
Merrill Lynch has denied that there was systemic discrimination at the firm but has acknowledged problems at some branches. "Obviously there were some incidents we regret and we're going to make amends for," said CEO David Komansky at Merrill's shareholder meeting in April. As part of the settlement, the company agreed to develop a new diversity program and create a new and more transparent policy for distributing accounts among brokers.
But the women's work is far from done. Both of these initiatives must be monitored by the plaintiffs. And unlike Texaco and Smith Barney in higher-profile cases, Merrill did not agree to a lump-sum settlement. Instead, it preferred to consider each of the 900 cases individually, a far less visible process and one much easier to bog down in delays.
At risk was the company's reputation for bringing Wall Street to Main Street by demystifying the investment process for millions of Americans, enabling them to simply walk into a storefront and purchase financial advice. Trust in the company might be undermined if customers suspected that Merrill was mishandling their investments by steering them toward male brokers or abruptly firing female brokers and subdividing their clients, as the lawsuit claims. Although Merrill's brokerage services are just a fraction of the company's overall business, they project the public image of the firm.
This was the company's chief vulnerability, but while Merrill could afford many Stanton commercials to protect its image, the women were hardly as prepared.
Marybeth Cremin, the lawsuit's first plaintiff, describes herself as a "reluctant feminist." Her boss in Merrill's Northbrook, Illinois, office told her, according to the complaint, that "he wished women could combine family and career but didn't think it was possible." Five years ago, after giving birth to her fourth child, she negotiated a deal to work part time and began transferring some of her clients to other brokers when her boss's secretary called to tell her she was terminated.
At that point, she just wanted her job back, even though she says she'd seen signs of discrimination since she first started working at Merrill Lynch in 1982 with an MBA, fresh from Kellogg. "The whole entire system was set up to be a good-old-boy network," she says now. "After a year or two, you would wake up and say, 'The system is stacked against me.' As a woman, you were never going to get on the gravy train because the guys had complete control over the distribution of the assets." But Cremin herself did get some of the gravy--enough, it seems, to make her want back in. In 1994 she was managing $60 to $70 million in client assets and producing $400,000 in commissions for Merrill Lynch, according to the complaint. Company documents indicate that a broker generating that much in commissions would have kept more than a third of the amount.
"If only he had called me back," says Cremin of her boss. "Merrill wouldn't be where it is today." But he didn't, and Cremin called the Chicago civil rights law firm of Stowell & Friedman.
lthough they all sensed problems in the firm, most of the plaintiffs who originally joined Cremin's suit waited until they were fired before taking legal action. Activism hasn't come easily to them. The business of being a broker, the constant competition for clients, and the every-woman-for-herself attitude are not exactly the same talents needed for collective action. In fact, most of the women didn't even know one another while they were working at Merrill. In 1996, when Cremin began her lawsuit, only 15 percent of the financial consultants at the firm were female, and they were scattered and isolated at branch offices across the country. (Today, only 16 percent are female, according to Merrill spokesperson Bill Halldin.)
But as the women have come up against the country's largest financial firm, they've had to change. Every time the buttoned-down Cremin, who describes herself as "a very private person," suspected Merrill was ignoring the terms of its agreement to change its business practices, she would talk to reporters and parade herself before cameras. "It was very disruptive to Marybeth to have to be bad to get Merrill's attention," says her attorney Linda Friedman.
To help her be "bad," Cremin contacted the Chicago chapter of the National Organization for Women (NOW), which threatened the company with pickets and protests, a threat withdrawn when Merrill devised its new diversity plan and accounts distribution policy. And after waiting six months for the company to settle their individual claims, most of the original plaintiffs finally found a way to be "bad" together.
It wasn't by organizing a conference as Stanton did, but by protesting one sponsored by Merrill Lynch. "The Mother of all Business Events," as it was advertised on the Women.future Web site, was to present 40 speakers, mainly women from the industry and the media, discussing how they became successful. A televised version was to be shown in Merrill offices and some theaters throughout the country on April 5. As people registered on the Web site to attend, they were treated to a succession of unsavory advertising slogans.
"It won't give you tips on the best lovemaking positions, but it may give you tips on staying on top of a merger," said one. "It won't help you plump up those facial lines, but it may help you plump up your bottom line," read another.
The women e-mailed the slogans to one another and posted online complaints while Cremin faxed an outraged letter to co-sponsors of the event, asking them to withdraw their support for "such a regressive, myth-perpetuating, insulting and insensitive organization." Women.com, a shopping and information network that provides the site for Women.future, sent Cremin a letter of apology, and the slogans were removed. But no sponsors withdrew from the conference--not Ernst & Young, British Telecommunications, or Baker & McKenzie. Not one of the scheduled speakers canceled, either. CNN correspondent Christiane Amanpour, a journalist known for her coverage of human rights abuses abroad, claims she never received the memo from Cremin. "The request to take part in the Women.future conference was recommended to me by my boss at CNN, who thought this looked like a good forum for women. (It was not after all malechauvinistpig.com)," she wrote in an e-mail. "I was not aware Merrill Lynch was one of the sponsors, I was not aware of the advertising slogans nor of the class action lawsuit."
Hillary Clinton also addressed the conference and made no mention of the lawsuit. At least one of the plaintiffs had sent an e-mail to the first lady's Web site asking for her support, but all she got back was an automatic reply saying the first lady had received the message. Polite letters to official addresses produced no reaction from the politician or the reporter who, for their part, were both surprisingly ignorant of what was, after all, a publicly known and fairly large class action lawsuit. But the experience did get the plaintiffs talking to one another--commiserating in e-mails and telephone calls that no one was paying attention to them.
Through these conversations, they discovered that Merrill had, in fact, already settled with one of their own. Through the previous summer and fall, Anne Kaspar had done everything she could to draw attention to the case. She spoke before a committee of the Massachusetts legislature, was featured in a few newspaper stories, and worked with the New York chapter of NOW. She also let it be known that she was meeting with agents to propose a book about her five years as a broker at Merrill Lynch in New York. The company settled with Kaspar last October.
By early March, when the company was using the Stanton commercial in prime time to advertise itself as a promoter of women to millions of Americans, Merrill had also made an offer to Linda Conti, a broker who had worked in the company's Indianapolis office. But the offer was so disappointing to her that she walked out of the meeting. "We did not settle. We were not on the same page," she wrote in an e-mail to 11 other women and a reporter at The New York Times. "I have to believe that being a calm, rational, successful woman with a good case is IRRELEVANT to a settlement. I actually believe it hindered me," she said, with a nod to the results Anne Kaspar got by being "bad."
At this point, Conti went public, posting comments on the Web publicizing the suit against the company. In an e-mail to other claimants, she reported that Merrill Lynch was aware of her every posting. "They are watching. Let's keep up the pressure." And the women did. In fact, their new electronic activism spread like wildfire to a host of chat rooms and message boards.
"Until this company cleans up it's act, it should be on every thinking investors' list of sin stocks," wrote apostrophechallenged "NoBull13" on a Merrill Lynch message board, where investors seek information about the company when considering stock purchases. "There is plenty of money to be made elsewhere," advised NoBull13, "without aiding and abetting this Neanderthal behavior."
Postings on Web sites multiplied and became increasingly raucous. One message made fun of a senior middle manager at the firm, calling him "Goofy Golfer," and recommended that "ML would benefit greatly from a purge at the top." Another said Merrill's CEO David Komansky "has to go."
In this new wave of excitement, Linda Conti e-mailed Merrill asking for 900 tickets to the company's annual shareholder meeting on April 18 in Plainsboro, New Jersey. In the month leading up to the meeting, e-mails flew back and forth among the women, who by now were dividing up organizing duties--Cremin, Conti, and Moss to talk to Chicago NOW; Kearney to get the tickets. Someone suggested bringing an ostrich to the annual meeting to celebrate the company's "25-year, head-in-the-sand diversity policy."
As the meeting drew nearer, Merrill was finally extending offers, shaking hands, even making apologies. "In five years, I have seen Merrill go from total denial, where they said, 'You guys are all losers,' to my mediation where they said, 'We're going to try to get it right,'" says Cremin. In return, the plaintiffs had to agree not to discuss the case. Cremin received special permission from Merrill to be interviewed for this story.
After Linda Conti, the Indianapolis broker who had walked out of her mediation only weeks before, agreed to a settlement, she stopped planning to picket the shareholder meeting and declined requests for an interview. But Nancy Thomas, whose claim has not yet been settled, shouldered the task. The Internet activism of the original group had also connected them to the newer members of the class, scattered in retail offices throughout the country. The baton seemed to be passing to the next generation of claimants.
On Monday, April 17, Merrill Lynch announced that its first-quarter earnings were $1.04 billion, the highest of any in the company's history. It was a powerful reminder of how uneven the race to the shareholder meeting actually was. The next morning in Plainsboro, extra security prepared for the onslaught. Plainclothesmen talked tensely into their sleeves. But only six of the more than 900 women showed up.
Nancy Thomas, who has suffered from chronic fatigue syndrome for more than a decade, was rushing down the aisle of the auditorium to get to her seat before the meeting began and caught her heel on the carpet, tumbling over and landing at the feet of Merrill's top brass. "I was so tired. I looked up, and Komansky was staring right at me," she says, embarrassed by the humble beginning of her protest. She nursed a sprained ankle and did not speak up during the half-hour meeting.
Others who were less beleaguered by the long fight with the brokerage firm rose to the occasion. Mary Shellnut, a claimant from Houston, wanted to know how much the suit was costing the firm, a question Stephen Hammerman, a board vice chairman, refused to answer "as a matter of policy." Tim Adams--the husband of Donna Sabb, who had worked for the firm for 14 years--asked how many women the firm had retaliated against for joining the lawsuit. "No one," said Hammerman. But then Sabb stood up and announced that she had been forced out after joining the class action. Sixty detailed claims of retaliation have been filed by class members against the company.
At a press conference just after the meeting, the New York chapter of NOW announced it had asked the U.S. Justice Department to begin an investigation into the practices of Wall Street firms, particularly Merrill Lynch and Salomon Smith Barney, where "women were fired and demoted after filing claims for sexual discrimination and sexual harassment."
The protests didn't end there, either. On Mother's Day, John "Launny" Steffens, the former head of brokerage operations at Merrill and now a senior adviser, returned to his three-story stone house in Princeton, New Jersey, to find Donna Sabb, her husband, her parents, and three labor activists with placards proclaiming, "Merrill is unfair to women." Sabb, dressed in a silk suit, went door to door telling Steffens's neighbors about the class action and leaving each a pink carnation.
By the end of May, the company had settled with all but three of the original eight plaintiffs for amounts ranging from $200,000 to $1 million, according to a source close to the case who insists on anonymity. Additionally, Merrill had extended offers to 700 of the other class members. It was the victory the women wanted, but also a kind of defeat. Just as they have learned how to be activists, to pool their talents and work together in drawing attention to their case, their voices are falling silent as most sign confidentiality agreements.
"A lot of people at Merrill would tell you we've learned a lot from these cases," says company spokesperson Bill Halldin. "There are a lot of things we're doing today we wished we would have been doing five or 10 years ago." Long-lasting change, however, will depend on the company's determination to enforce the new policies--and the willingness of employees and customers to hold them to it.
Elizabeth Cady Stanton's great-great-granddaughter, who is one of Merrill's clients, is thrilled to hear that her commercial for the firm angered some of the plaintiffs in the suit. "I love chaos and explosions, and if something good comes out of this, then that's great," she says. "I'd be happy to work with them and help them. Please tell them to call me." ¤