Lawsuit: GE Discriminates Against 1,500 Female Workers

A top attorney at General Electric Co. sued the company Thursday, claiming that she and more than 1,500 other women executives were systematically underpaid and underpromoted.

The lawyer, Lorene Schaefer, claimed that women are underrepresented at the conglomerate's top levels and denied promotion to corporate executive ranks.

In papers filed in U.S. District Court in Connecticut, Schaefer, 43, charged GE, the world's second-largest company by market capitalization, with gender discrimination. Her suit also names 13 GE officers and directors, including Chairman and Chief Executive Jeff Immelt.

The GE suit came two days after a divided U.S. Supreme Court ruled that people have only six months to bring lawsuits claiming pay discrimination.

Schaefer's suit, which is seeking class-action status, seeks $500 million in damages for a class of about 1,500 to 1,700 GE women executives and lawyers, according her attorney, David Sanford of Sanford Wittels & Heisler LP.

"This lawsuit is designed to achieve systemic injunctive relief to change GE's discriminatory pay and promotions practices and policies," Schaefer charged in court papers. "Women have made few inroads into the domain of the officer's 'club' at GE."

In an e-mail, GE spokesman Gary Sheffer said, "We strongly deny the allegations made by Ms. Schaefer. We will defend against these claims in court."

Accusations of unfair pay and the continued dominance of male executives in the top ranks continue to dog corporate America.

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.

Wal-Mart Stores Inc. is facing the biggest sexual discrimination case in U.S. history, a class action suit charging bias in pay and promotions of more than one million women.

"When you're looking at claims like this, systemic discrimination, we're not looking for the smoking gun of someone saying something inflammatory or discriminatory," said Tanya Hernandez, professor of law at Rutgers Law School, in Newark, New Jersey. "What we're looking to see is whether there are statistically significant patterns of exclusion."


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.

In an interview, Schaefer said that after two years in her post, GE managers told her in April that she was to be demoted and replaced as general counsel of the unit.

Schaefer said GE officials told her they wanted to replace her with a "big time" general counsel, but did not provide specifics as to how that differed from her qualifications.

"I thought about what I had experienced at the General Electric Company and what women across the corporation had been talking to me and talking to each other about for my entire 13-year history at the company, and I decided to hire counsel," Schaefer said. "There are many, many women who have had the same experience as mine."

After hiring an attorney, Schaefer was placed on paid administrative leave in May.

"All decisions regarding Ms. Schaefer were based on the merits," GE's Sheffer said in a phone interview.

He said that women currently account for 27 of the company's top 186 employees, classed as "officers," up from 17 in 2001. He added that GE currently have 62 women in the next management rank down, the "senior executive band" out of about 400 in total, and up from 42 in 2001.

GE's CEO, chief financial officer and the heads of its six major divisions are all men. Its top female executives include senior vice presidents Pamela Daley and Charlene Begley.

Daley is senior vice president of corporate business development, while Begley headed its plastics unit and is overseeing the closing of the sale of that unit to Saudi Basic Industries Corp.

In all, GE employs more than 300,000 people.

GE spokesman Sheffer said the company's calculations show that women at GE run businesses that brought in about $40 billion in revenue last year, about one-quarter of the corporate total.

GE shares closed down 15 cents to $37.58 on the New York Stock Exchange.