Gender-Bias Class Action Against GE by Former Counsel Advances

January 28, 2008

A high-ranking attorney for General Electric Co. can go ahead with her class-action lawsuit against what she calls the “very male-dominated culture” in the international conglomerate, a federal judge has ruled.

U.S. District Judge Peter Dorsey last week rejected a motion filed by GE to prevent Lorene Schaefer’s lawsuit from achieving class-action status. A class-action lawsuit would allow Schaefer to gather as many as 1,500 plaintiffs, including women who hold entry-level executive jobs and all the company’s female lawyers. The lawsuit potentially seeks damages of $500 million (euro341 million).

Schaefer, general counsel of Erie, Pa.-based GE Transportation, filed a suit in May 2007 accusing officials of giving unfair preference to men in promotions to top-paying legal jobs.

Among its claims, GE argued that Schaefer cannot lead a class-action lawsuit because she had access to confidential client information while employed with GE.

Dorsey rejected that argument for now.

“If at any point during discovery, the defendants learn and can demonstrate that plaintiff is inappropriately using confidential client confidences in asserting her claims or representing the class, the court may reconsider the propriety of plaintiff’s class allegations at that time,” Dorsey wrote in his 30-page ruling.

In a statement, Schaefer said the ruling would benefit hundreds of GE employees.

“Those women have long struggled to shatter the GE glass ceiling and its culture of gender discrimination that have prevented females from advancement and equal pay,” she said.

GE spokesman Gary Sheffer said the company believes the lawsuit is without merit. “We disagree with the decision and will continue to contest this lawsuit,” he said.

Schaefer decided to file a lawsuit after learning in April that she was to be demoted from her job as GE Transportation’s top legal officer.

Schaefer was an executive band employee — an entry-level executive — since 1997 and a GE employee since 1994. She was paid $380,000 (euro259,156) last year, including bonuses.

She was placed on paid administrative leave in May after complaining about the pending demotion.

The lawsuit, which seeks an injunction to halt GE’s pay and promotion policies and practices, names Chairman and Chief Executive Jeff Immelt and numerous other executives.

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