Kidder Peabody Wins Dismissal of EEOC Suit

Kidder, Peabody & Co. won dismissal of an age discrimination lawsuit the U.S. Equal Employment Opportunity Commission filed against the now-defunct securities firm. If the ruling is upheld on appeal, it would weaken the federal government’s ability to police Wall Street’s compliance with discrimination laws by barring the EEOC from seeking monetary damages on behalf of employees who sign arbitration agreements, the EEOC said. Courts have long upheld the securities industry’s practice of making employees and customers give up their right to sue employers over job or brokerage account complaints. Instead, disputes are resolved by industry-run arbitration panels. U.S. District Judge John Sprizzo in New York ruled the EEOC can’t seek monetary damages on behalf of nine former Kidder bankers because they agreed to arbitrate their bias claims out of court. The judge rejected the EEOC’s argument that it should be allowed to intervene and seek damages for employees in age, race, sex and other discrimination cases despite the arbitration contracts because the EEOC represents the public interest. The EEOC in New York said it was considering an appeal.