Citigroup Sued for Gender Discrimination

Citigroup was hit by a gender discrimination lawsuit Wednesday, which charges that the banking giant pays women less, promotes them less and fires them first. Citigroup policy, according to the lawsuit, gives managers unfettered discretion in their management decisions, instead of requiring judgments to be based on performance or other objective criteria.

According to the six women who filed the suit, "It is a well-known mantra at Citigroup that 'if there's a layoff, it's women and children first.'" Five of the women suing were indeed laid off by Citigroup, even though, if the allegations are true, obviously less qualified men in the same groups kept their jobs. In fact, the alleged differences in qualifications and performance between the women laid off and the men retained are so stark, the manager involved, David Brownstein, will have a hard time explaining what, other than gender, drove his decisions.

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Consider the case of Amy Bartoletti, a former director of Citigroup. Bartoletti had been with the bank for 16 stellar years when her immediate supervisor was laid off in July 2008. David Brownstein promoted her to fill the spot. She was allegedly the obvious choice for the promotion; the only other person at her level in the department was a man named Michael Koessel, who had worse performance reviews, "360-degree reviews" -- which include peer evaluations, and received lower performance bonuses. In addition, Bartoletti had significantly more management experience than Koessel. Nonetheless, when Koessel went to Brownstein and threatened to quit, Brownstein made him co-chair of the department. And then in November, during the next round of layoffs, Koessel kept his job, but Bartoletti didn't.

Citigroup Calls the Allegations "Inaccurate or Incomplete"

Citigroup has responded by saying that these women aren't telling the whole truth, and in some cases, simply not telling the truth. "Many of their allegations are either totally inaccurate or selectively incomplete. The facts do not support their claims of gender discrimination," a Citigroup spokeswoman said in an emailed statement.

Citigroup further notes that:

Throughout 2008, Citi's Public Finance department was forced to reduce its workforce due to the severe and sustained downturn in the financial markets. These plaintiffs were just five of approximately 70 men and women in the public finance department who were part of that reduction, and they were selected based on legitimate business reasons, not based on their gender, and were selected in the very late rounds of the reduction in force, having survived several earlier rounds of reductions throughout 2008.

The sixth plaintiff is still a Citigroup employee, and alleges that throughout her employment she has been subjected to a hostile work environment of sexual innuendo and gender comments, and was demoted after returning from maternity leave because she was a now a mother. Citigroup similarly rejects this plaintiff's allegations, saying:

Many of her allegations are false, unsupported or taken completely out of context. The facts demonstrate that the employment decisions involving her role were based on her performance and not her gender or her pregnancy or the fact that she took family leave.

As is common in gender discrimination suits, much of the focus is on these "he said-she said" claims. But it is the plaintiffs' statistical evidence that will ultimately prove whether Citigroup has committed enough gender discrimination to support a class action. And these women do offer evidence that so few women are in upper management at Citigroup, and so many women were laid off relative to men, that neither fact could result from chance.

Goldman Sachs and AIG Face Similar Claims

Although not relevant at trial, plaintiffs can also point out that Wall Street is infamous for being a "boys club" and many major employers on the Street have been sued for, and/or settled, gender discrimination claims. Currently Goldman Sachs (GS) is also facing a gender discrimination suit, as is American International Group (AIG). Why should Citigroup be so different?

For its part, Citigroup counters that:

Citi has a long-standing commitment to equal employment practices and to provide a professional and respectful workplace free of unlawful discrimination. We are disciplined, focused, consistent and vigilant in regard to our diversity-related efforts. Citi has several diversity initiatives that allow us to enhance innovation, create business opportunities, and relate to our valuable client base. Our diversity work has been recognized by external organizations and publications including Working Mother Magazine, which named Citi as one of the 100 Best Companies for Working Mothers 19 times, and Diversity Inc Magazine, which recognized Citi as one of its Top 25 Noteworthy Companies for Diversity.

Of course, similar words of praise from Working Mother magazine didn't help Novartis (NVS) when it faced -- and lost -- a massive gender discrimination suit earlier this year.