Price Waterhouse, one of the nation's Big Eight accounting firms, violated federal antidiscrimination law by allowing "sexual stereotyping" to play a role in its decision not to admit a female senior manager as a partner in the firm, U.S. District Judge Gerhard A. Gesell ruled yesterday.
The ruling could have broad implications for accounting firms throughout the country, some legal experts said. It found that, while the discrimination may have been unconscious on the part of individual partners, Price Waterhouse violated the law by failing to take steps to prevent biased judgments from entering into the process by which it chooses partners.
The senior manager, Ann B. Hopkins, argued that she had been denied a partnership because assertive behavior by her was considered offensive while it was viewed as acceptable in men at the firm. Hopkins said she was advised by a partner, a strong supporter of hers, to be more feminine in the way she walked and talked, to have her hair styled and wear makeup and jewelry.
Price Waterhouse did not dispute Hopkins' competence but said that she was denied partnership because she lacked essential "interpersonal skills" and did not get along with staff.
Gesell ruled that Hopkins was not entitled to a court-ordered partnership now or to back pay because she voluntarily resigned from the firm after her disappointment.
In light of "considerable problems" that Hopkins had with colleagues, Gesell said, she also failed to prove that she would have been made partner if the accounting firm's decision "had not been tainted by sexually biased evaluations."
The decision appears to be the first ruling of illegal sex discrimination by an accounting firm since the U.S. Supreme Court ruled in May 1984 that partnership decisions are subject to federal employment discrimination laws, according to Hopkins's attorney and other legal experts.
"Although the stereotyping by individual partners may have been unconscious on their part, the maintenance of a system that gave weight to such biased criticisms was a conscious act of the partnership as a whole," Judge Gesell wrote in his opinion.
"Price Waterhouse's failure to take the steps necessary to alert partners to the possibility that their judgments may be biased, to discourage stereotyping, and to investigate and discard, where appropriate, comments that suggest a double standard constitutes a violation of Title VII of the Civil Rights Act of 1964 in this instance," he said.
Price Waterhouse issued a statement yesterday from Joseph E. Connor, chairman and senior partner, saying the firm is "very pleased" that the court "found no intention on the part of the firm or another of its partners to discriminate against Ann Hopkins."
But Connor added that the firm "does note that the court appears to be saying that organizations such as Price Waterhouse have an affirmative duty to sensitize their partners to the possibility that inadvertent sexual stereotyping of female candidates may occur."
Hopkins' attorney, Douglas B. Huron, said he and his client "consider it a victory." They have not decided whether to appeal the judge's decision not to award Hopkins back pay or a partnership at the firm.
"This really is a new area, and we're very pleased to have gotten the decision we did," Huron said. "It has implications generally for larger partnerships . . . . Other firms will have to take a hard look at these issues."
Hopkins had received a number of glowing reviews of her work at Price Waterhouse. But she also was strongly criticized for being "overbearing" and in need of "a course in charm school," according to the partners' evaluations of her.
In 1982 Hopkins was proposed for a partnership, but her candidacy was put on hold. When she was informed later that it was very unlikely she would be admitted as a partner, she left the firm in January 1984. Last September she filed suit.
In July 1984, only seven of Price Waterhouse's 662 partners were women, Gesell noted.
Marsha Levick, legal director of the National Organization for Women Legal Defense and Education Fund, said the Supreme Court ruling last year did not result in many lawsuits against law firms, possibly because partnership deliberations there are so secretive.
Large accounting firms have been a particular focus of her group's efforts to counter sex discrimination in partnerships, she said.
"It's fertile territory for women," Levick said, particularly since there has been a large increase in women going into the field. "It may be that this case . . . may spur more lawsuits."
Sarah Burns, an attorney at Georgetown University Law Center, said the decision was "groundbreaking" in the sense that Gesell recognized the dynamics of stereotyping.
"His opinion certainly cautions decision-makers and employers that they had better look for evidence of stereotyping and take steps to curtail it," she said.