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Harvard Women's Law Journal

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On May 20, 1996, three women filed a sexual harassment and discrimination lawsuit against the Wall Street investment firm Smith Barney. Later joined by twenty additional women, the plaintiffs alleged that Smith Barney failed to hire and promote women, created a hostile work environment, and discriminated on the basis of pregnancy and marital status. The lawsuit quickly gained widespread publicity, most notably for its accusation that the former manager of the Garden City, New York, branch had established a fraternity-like "boom-boom room" in the office basement where female employees were either excluded or harassed if allowed to enter. On November 18, 1997, the parties announced a settlement that both sides claimed as a victory. The settlement, however, left larger employment law issues of concern to women and people of color wholly unresolved.

Ostensibly, the Smith Barney litigation was a typical sexual harassment lawsuit and settlement. Throughout the case, however, the plaintiffs faced an obstacle additional to the normal difficulties plaintiffs face in having their employment discrimination claims heard in court. Like many large firms today, Smith Barney required its employees to sign pre-dispute mandatory arbitration contracts as a condition of employment. Part of the reason the lawsuit was brought as a class action was to avoid having the case heard in front of a securities industry arbitrator. Whether this class certification strategy would have worked remains an open question, however, since the parties settled before the issue was determined.



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