Lawsuit accuses GE of bias against women

Lorene F. Schaefer says she moved steadily up General Electric's in-house legal ladder for 13 years, getting praise and stock grants each step along the way. She made it as far as general counsel for GE Transportation. But this year, she said in an interview, ''I bumped up against an absolute glass ceiling into the executive ranks.'' On May 31, Schaefer, 43, filed a lawsuit in federal district court in Connecticut, accusing GE, the world's second-largest company, of systematically discriminating against women in both pay and promotions. She is seeking to have the suit certified as a class action. The lawsuit alleges that GE pays female lawyers and women in entry-level executive jobs less than men, and it accuses GE of failing to promote its female entry level executives, or executive band employees, at the same rate it promotes men in the same jobs. The lawsuit, which seeks an injunction to halt GE's pay and promotion policies and practices, names Chairman and Chief Executive Jeff Immelt and 12 other GE officers and directors. The lawsuit says Immelt has taken responsibility for changing the top leadership of GE since he became chief executive in 2001. But female senior professional employees comprise about 20 percent, "a disproportionately small percentage," Schaefer says in her lawsuit. "Women at GE have remained in this disproportionately underrepresented level for the past five years since CEO Immelt took," the lawsuit says. Schaefer maintains that GE has done a stellar job of helping women migrate up through management. But she said that only 13 percent of GE's officers were women, about the same percentage as six years ago. Moreover, she said that many male general counsels were part of GE's ''senior executive band,'' the job level just below corporate officer. She said that most female general counsels, including herself, were ranked lower. ''There are women at all levels throughout that corporation who are ready to be promoted, so GE can no longer say that it does not have a good feeder pool to tap,'' she said. David Sanford, one of Schafer's lawyers, said he expected as many as 1,700 women to join the suit and that he was asking for back pay, raises and compensatory damages totaling about $500 million to be distributed among the plaintiffs. Schaefer, a 13-year veteran of the Fairfield, Connecticut-based company, has served as general counsel at GE's transportation unit, an Erie, Pennsylvania-based business that makes railroad locomotives. GE's other businesses include commercial lending, aircraft engines, appliances and NBC media. Schaefer was an executive band employee since 1997. She said she decided to sue in April after learning that she was to be demoted from her job, which paid $380,000 last year, including bonuses. Executives, including Immelt, decided she was to be replaced by a "big-time general counsel," she said, but they did not provide specifics as to how that differed from her qualifications "I had never heard those terms, 'big-time general counsel," she said. ''There was no rational explanation other than the fact I was a woman.'' Schaefer has been on paid administrative leave since May 10, shortly after her lawyers alerted GE of the pending suit. She said she would like to return to GE -- but with a higher title and higher pay. GE has faced discrimination charges before. Two years ago, Marcel T. Thomas, then the chief executive of GE Aviation Materials, sued GE after he received a negative evaluation and a negligible raise. Thomas, who is black, charged racial discrimination and sought to have his suit certified as a class action. He never received the certification, and Thomas and GE quietly settled. Last month, Wall Street investment bank Morgan Stanley said it will pay $46 million to settle a class-action lawsuit that claimed it pays thousands of female brokers and trainees less than it paid men. Meanwhile, Wal-Mart Stores Inc. is facing the biggest sexual discrimination case in US history, a class action suit.