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People Top 5
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- August 16, 1999
- Vol. 52
- No. 6
Two Illinois Attorneys Teach America's Brokerage Houses a Painful Lesson: Discrimination Doesn't Yield Dividends
But attorneys Mary Stowell and Linda Friedman saw plenty wrong. Approached in 1996 by Thomann and 22 other women, the tiny Chicago firm of Stowell & Friedman, Ltd., filed a class-action sex discrimination suit against the venerable brokerage firm—the second largest in the nation—never imagining that they might have an impact on an entire industry. "I don't know if we were just naive or unimpressed," says Friedman, 39. "It never occurred to us to be afraid." They were so undaunted, in fact, that the next year they hit Merrill Lynch with a similar suit. Then they waited...and waited. "Class actions," says Stowell, 53, "are like giving birth to an elephant: There's a very long pregnancy."
Their persistence is paying off. Since both cases were settled separately several months ago, the two firms have adopted practices intended to prevent future abuses in such areas as training, promotions, wages and account opportunities. For coming forward, the 23 Salomon plaintiffs shared an initial $1.9 million, and their eight Merrill Lynch counterparts split $600,000, while the parties continue to negotiate a final figure. In addition, under the terms of the respective settlements, Stowell and Friedman have filed claims on behalf of 1,900 women who were part of the class of employees defined by the suit against Salomon and 900 women at Merrill Lynch. These claims, which may take another two years to resolve, could add millions to the remediation kitty. Now Stowell and Friedman are readying claims against the CIBC Oppenheimer Corp. and Goldman Sachs brokerages.
"This has brought the industry to its knees," says Steven Piatt, president of the National Employment Lawyers Association. "By forcing these successful class actions, Stowell and Friedman have forced these companies to take notice." The cases have also put a dent in the industry-wide practice of mandatory arbitration, a grievance procedure in which the industry itself chose the arbitrators. Since January, for example, the New York Stock Exchange has stopped hearing mandatory arbitration cases concerning civil rights and allows brokerage employees to take such claims to court. Both Merrill Lynch and Salomon say they never tolerated discrimination. "If it is brought to our attention, we investigate immediately," says Bill Halldin, a Merrill Lynch spokesman. Still, says Joan Guggenheimer, an attorney for Salomon, "to some extent both of the lawsuits were a wake-up call to the industry as a whole."
Few who know Stowell and Friedman are surprised that they were the ones to provide such a call. A child of the '50s, Stowell was born in Memphis to an airline pilot and a home-maker who later became a teacher. "When I was young, I thought men's work was more important than what women did," she says. "I wanted to compete with men." Yet after graduating from Will Rogers High School in Oklahoma, she went off to secretarial school, married at 20 and worked as a secretary before earning a B.A. at the University of Missouri at Kansas City. Divorced in 1971, she attended Northwestern Law School—"I thought law would give me a chance to succeed on my own"—then worked in the U.S. Attorney's Office in Chicago, where she met her current husband, attorney Jim Streicker, now 54, who has two children from a previous marriage.
Friedman, the daughter of politically active parents in suburban Wilmette, Ill., is 14 years to the day Stowell's junior and came of age in the '60s. "By the time I was 8," says Friedman, who is single, "I was knocking on doors and handing out literature for liberal candidates and the ERA." During her four years at the University of Colorado at Boulder, she protested for the closure of Rocky Flats, a nearby nuclear plant; while a law student at DePaul University, she clerked for Judge James Parsons, the nation's first African-American federal judge.
Friedman initially approached Stowell seeking legal advice. Mentor-ship quickly evolved into friendship, then partnership. Since hanging out a shingle together in 1989, they've worked side by side, often for 14 hours at a clip, seven days a week. Fortunately they complement one another well. "Mary is the older sister I never had—and wasn't sure I ever wanted," says Friedman with a smile. "I fall victim to insults and take things more personally; it takes a lot to ruffle Mary's feathers." Says Stowell: "Linda's tenacity is a model. I'll think something is dead; Linda keeps at it and gets results."
Neither seems as impressed by their success as some of the women who still work at Salomon and Merrill Lynch. "Women across the country at Salomon Smith Barney have called to thank us," says Lorraine Parker, a plaintiff from the Garden City office. "They all say the class action has made a difference." Though she has already received $150,000 and will get even more in the settlement, Roberta Thomann quit trading to work for the Roman Catholic Diocese of Brooklyn. "I miss the securities field, but I don't know if I'll ever go back," she says. Her treatment, she adds, "left a bad taste."
Some claimants had, in fact, hoped for a trial so that the brokerage firms' dirty linen would be publicly aired. "We want to go to court to show the abuse and the harassment," says Judy Mione, 59, who opted out as a Salomon plaintiff to pursue her own litigation. And though Merrill Lynch plaintiff Linda Conti, 34, praises the attorneys' tactics, she had hoped for a public admission: "I would have liked them to stand up and say, 'Yes, we are scum.' "
While they defend their decision to settle the cases, Stowell and Friedman concede that even the most finely tuned agreement can't eradicate abuse. "It's like melting a glacier with a hair dryer, because the discrimination is so entrenched," says Stowell. "But the goal is to welcome women into the securities industry. The more women there are, the more it will change."
Barbara Sandler in Chicago
- Barbara Sandler.
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