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Case Name Martens v. Smith Barney EE-NY-0206
Docket / Court 96-3779 ( S.D.N.Y. )
State/Territory New York
Case Type(s) Equal Employment
Special Collection Private Employment Class Actions
Case Summary
On May 20, 1996, a group of female employees filed this lawsuit under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., against Smith Barney Inc. in the United States District Court of the Southern District of New York. The plaintiffs, represented by private ... read more >
On May 20, 1996, a group of female employees filed this lawsuit under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. § 2000e et seq., against Smith Barney Inc. in the United States District Court of the Southern District of New York. The plaintiffs, represented by private counsel, asked the Court for injunctive and compensatory relief alleging that Smith Barney discriminated against its female employees. Specifically, the plaintiffs contended that Smith Barney committed gender discrimination, sexual harassment, and pregnancy discrimination; and further paid women lower wages, retaliated against complainants, and violated several state, city and common law statutes in these practices.

The evidence was so overwhelmingly against Smith Barney, that the Court (Judge Constance Baker Motley) never officially certified the class of female employees. Yet, the case itself is much more complex than it first appears. As the trial proceeded, more female employees joined the plaintiffs, and Smith Barney's motion to dismiss the complaint was never decided as a preliminary settlement was reached on November 18, 1997.

After many fairness hearings, where objections to the settlement were stated, on July 28, 1998 (Docket #113--listed as July 24th), the Court approved a final settlement agreement. Martens v. Smith Barney, 1661385 WL 2 (S.D.N.Y 1998). The agreement approved the class of female employees working for Smith Barney in the retail sales, investment banking or capital markets divisions. It affected an estimated 23,000 women. Smith Barney was ordered to pay for all costs associated with notifying the class of the three part dispute resolution process. The resolution process was run by a unit from the Duke Law School, whereby women could pursue individual claims, or join in claims arising from actions in a single branch office. In addition to individual relief, the settlement stipulated that Smith Barney spend $15 million toward diversity initiatives and training. In total, the firm paid $150 million to women who filed claims through its dispute resolution system.

Many plaintiffs were still unsatisfied with the settlement and chose to opt out. It is estimated that around 1,900 women filed complaints, but the damages awarded were all confidential according to the agreement. This is the procedure many plaintiffs had issue with from the start. Normally, because of contracts signed by brokers with the New York Stock Exchange (NYSE) and the National Association of Securities Dealers (NASD), any employment lawsuit is to be settled through a mandatory arbitration process separate from the courts. The one exemption to this contract being class action lawsuits. Thus, on the complaint the NYSE and NASD were listed as defendants as the plaintiffs sought declaratory relief against these parties for violating their rights to a court hearing under Title VII and the United States Constitution. In an opinion on these claims given on December 2, 1999, the Court (Judge Motley) dismissed these charges, and gave the plaintiffs an opportunity to opt back into the settlement. Martens v. Smith Barney, 190 F.R.D. 136 (S.D.N.Y 1999).

Two of the original plaintiffs opted out of the settlement because they did not believe that it was fair in any manner. While the Court (Judge Motley) gave them the option of opting back into the settlement, the plaintiffs chose to continue their litigation on their own terms. However, in doing so, the statutes on limitations came into play. While these plaintiffs were still working out new representation, having been dissatisfied with the class counsel, the Court took action.

On January 31, 2000, the plaintiff's new lawyers were chastised by the Court (Judge Motely). The Court ordered that the plaintiff's motion to enforce the settlement be denied. The Court further ordered that the plaintiff's counsel, back up alleged improprieties with facts, and that pro hac vice status be clarified. Martens v. Smith Barney, 108831 WL 2 (S.D.N.Y. 2000).

On May 15, 2000, according to the docket, the Court (Judge Motley) dismissed the remaining opt out plaintiffs from the case, with prejudice.

Then, on May 17, 2000, according to the docket, the Court (Judge Motley) imposed sanctions on the counsel of the dismissed plaintiffs, and further denied the motion to enforce the settlement. The plaintiffs then appealed.

On November 20, 2001, the United States Court of Appeals of the 2nd Circuit (Judge Calabresi, Judge Sotomayor) handed down its decision. The Court first ordered that the District Court's judgment denying the motion to enforce be vacated, and that this be remanded back to the District Court. The order removing pro hac vice and sanctioning the plaintiff's counsel was vacated. The District Court's judgment dismissing the individual plaintiffs was vacated. And finally, the plaintiff's motion to reassign the case to another District Court was denied. Martens v. Smith Barney, 273 F.3d 183 (2nd Cir. 2001). Thus, most of the decision went for the plaintiffs, and things seemed to take a turn for them.

Back in the District Court, the case was reassigned to Judge John Koeltl. On July 9, 2003, he denied the plaintiff's motion to enforce the settlement agreement. Martens v. Smith Barney, 21543506 WL 19 (S.D.N.Y. 2003). The Court stated that there is in fact, no actual motion to enforce a settlement in any sort of rule or civil litigation procedure guide. There were, according to the Court, many ways to appeal the enforcement of a settlement, and all were clearly laid out before the plaintiff's counsel, who disregarded these facts. Martens v. Smith Barney, 21543506 WL 2 (S.D.N.Y. 2003). The Court further argued that the small number of plaintiffs moving to enforce do not represent a large enough body to consider action against a settlement that was a great cost to achieve, despite the merits of the individual claims Martens v. Smith Barney, 21543506 WL 6 (S.D.N.Y. 2003).

Thus, for the most part the plaintiffs objections were dismissed. While there was more action, resulting in appeals by the plaintiffs, no information regarding these motions or their appeals is made available except on the docket. For all intents, the case was closed by the end of 2004. However, a motion by the defendants reopened the case temporarily in 2005.

On October 7, 2005, the Court (Judge Koeltl) denied defendants' motion to reopen the action and enjoin certain plaintiffs involved in a class action lawsuit in the United States District Court of the Northern District of California. The defendants alleged that this other case, Amochaev v. Citigroup Global Markets, Inc., d/b/a Smith Barney, involve actions that were stipulated under the settlement of Martens v. Smith Barney. Martens v. Smith Barney, 2649023 WL 1 (S.D.N.Y. 2005).

The case was officially closed with the last entry on the docket dated September 29, 2006.

Susan Antilla's 2002 book about the case is titled "Tales From the Boom Boom Room: Women vs. Wall Street."

Kunyi Zhang - 08/30/2010

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Issues and Causes of Action
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Affected Gender
Accommodation / Leave
Discharge / Constructive Discharge / Layoff
Harassment / Hostile Work Environment
Other Conditions of Employment (including assignment, transfer, hours, working conditions, etc)
Pay / Benefits
Pregnancy discrimination
Sex discrimination
Disparate Treatment
Pattern or Practice
Plaintiff Type
Private Plaintiff
Race, unspecified
Causes of Action Title VII (including PDA), 42 U.S.C. § 2000e
Defendant(s) Smith Barney Inc.
Plaintiff Description Many female current or former employees of Smith Barney (a securities brokerage firm), some of whom filed on behalf of themselves and similarly situated individuals
Class action status sought Yes
Class action status outcome Denied
Filed Pro Se No
Prevailing Party Mixed
Public Int. Lawyer No
Nature of Relief Damages
Injunction / Injunctive-like Settlement
Source of Relief Settlement
Form of Settlement Court Approved Settlement or Consent Decree
Filed 05/20/1996
Case Closing Year 2006
Case Ongoing No
Additional Resources
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Court Docket(s)
EE-NY-0206-9000.pdf | Detail
Source: PACER [Public Access to Court Electronic Records]
General Documents
Complaint [ECF# 1]
EE-NY-0206-0001.pdf | Detail
Order (approving class action settlement and dismissing claims) (1998 WL 1661385)
EE-NY-0206-0005.pdf | WESTLAW | Detail
Order (dismissing claims against NASD and NYSE) [ECF# 159] (190 F.R.D. 134)
EE-NY-0206-0004.pdf | WESTLAW| LEXIS | Detail
Source: Google Scholar
Order (dismissing motion to enforce settlement) [ECF# 198] (2000 WL 108831)
EE-NY-0206-0006.pdf | WESTLAW | Detail
U.S. Court of Appeals
2nd Circuit Order (vacating District Court decisions) (273 F.3d 159)
EE-NY-0206-0003.pdf | WESTLAW| LEXIS | Detail
Source: Google Scholar
Order (denying motion for interlocutory appeal) [ECF# 353] (238 F.Supp.2d 596)
EE-NY-0206-0002.pdf | WESTLAW| LEXIS | Detail
Source: Google Scholar
Order (denying motion to enforce) [ECF# 367] (2003 WL 21543506)
EE-NY-0206-0007.pdf | WESTLAW | Detail
Order (denying motion to enjoin) (2005 WL 2649023)
EE-NY-0206-0008.pdf | WESTLAW | Detail
show all people docs
Judges Calabresi, Guido (Second Circuit) show/hide docs
Koeltl, John George (S.D.N.Y.) show/hide docs
EE-NY-0206-0002 | EE-NY-0206-0007 | EE-NY-0206-0008 | EE-NY-0206-9000
Motley, Constance Baker (S.D.N.Y.) show/hide docs
EE-NY-0206-0004 | EE-NY-0206-0005 | EE-NY-0206-0006
Sotomayor, Sonia (S.D.N.Y., Second Circuit, SCOTUS) show/hide docs
Plaintiff's Lawyers Dermody, Kelly M. (California) show/hide docs
Dobrish, Robert Z. (New York) show/hide docs
Friedman, Linda (Illinois) show/hide docs
Garrison, Joseph D. (Connecticut) show/hide docs
Jamison, Phyllis (Montana) show/hide docs
Moloshok, Matthew Eli (New Jersey) show/hide docs
Montanez, Richard (Connecticut) show/hide docs
Palter, Michele Lang (Connecticut) show/hide docs
Phelan, Gary E. (New York) show/hide docs
Spriggs, Peter Kent (Florida) show/hide docs
Defendant's Lawyers Karp, Brad Scott (New York) show/hide docs
Toal, Daniel John (New York) show/hide docs

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