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How glass ceiling discrimination decelerates the careers of female mutual fund managers

Glass ceiling and promotion discrimination issues plague many professions, including economicsscience, and technology fields.  Add to this list the mutual fund industry, which is one of the most lucrative (and male-dominated) vocations, where senior managers wield considerable power within their organizations.

It is also an industry driven by quantifiable results–how much money did you make the fund in a given year?–which should allow for an ideal setting to evaluate how equally performing men and women are treated, and whether and to what extent glass ceiling/promotion discrimination problems are impeding the careers of female mutual fund managers.

This is precisely the issue analyzed by a study, discussed in more detail below, conducted by Brad Barber, Anna Scherbina, and Bernd Schlusche, and reported on by Jeff Brown of the Wall Street Journal.

Glass ceiling discrimination

A glass ceiling generally refers to an unfair, artificial barrier that prevents certain employees (women; people of color; LGBT) from fairly competing for upper management jobs in companies.  In practice, it keeps qualified employees from reaching their full potential and, depending on applicable law, illegally blocks them from occupying the best-paid and most powerful positions.  The glass ceiling can be caused by, among other things:

  • entrenched attitudes/stereotypes about what type(s) of people should get the “top” jobs at the company;

  • subjective/hard to define qualifications for promotions that introduce conscious or unconscious biases into decision-making; and/or

  • a lack of networking and mentoring opportunities for women, people of color, and LGBT individuals.

Title VII of the 1964 Civil Rights Act, as well as other federal and state laws, make it illegal for an employer to use promotion practices that create a glass ceiling.

Female mutual fund managers face glass ceiling discrimination and other barriers

The study by Barber, Scherbina, and Schlusche evaluated, among other things, the impact of glass ceiling/promotion discrimination on the career trajectories of women in the mutual fund sector.

What made the mutual fund field ripe for study, according to the study, was that it “offers an ideal setting to analyze the influence of personal attributes on career progression because the performance of individual mutual fund managers is easily measurable.”  That’s because, “[m]utual fund families care about returns and fund flows generated by managers because both increase the value of total net assets (TNA) under management, and fund families collect fees calculated as a percent of TNA.”

By way of context, the study notes that, while women have always comprised a small fraction of the mutual fund workforce, female representation was actually on the rise during the 1990’s but then “the trend changed around the burst of the dot-com bubble, and the percentage of women working as mutual fund managers declined from a peak of 13.83% in August 1999 to 9.78% in December 2016, the end of our sample period.”

As to the methods used to evaluate how female fund managers fared compared to their male counterparts, the study further pointed out that “the mutual fund setting allows us to set up a perfect experiment in which we can compare male and female managers with identical track records and thereby rule out possible estimation biases.”  They purported to do so by devising “a test in which we focus on co-managers of the same fund, who have no prior fund management history and who started to co-manage the fund in the same month. We then track the career progression of these managers.”

Ultimately, the study’s authors found that “female managers are significantly more likely than male managers to be removed from (or leave) the job of co-managing the fund without any substitute fund management responsibilities.”

The study’s findings about glass ceiling discrimination among female mutual fund managers

After analyzing voluminous and detailed sets of data, the study made several big picture conclusions, including:

  • “We find that past performance is a very important determinant of managers’ promotions, demotions,and firings. This finding suggests that the money management industry is a largely meritocratic profession that rewards performance.”

  • “However, we document that managers’ personal attributes also influence their career outcomes.”

  • “For example, a female manager with the same fund management duties and past performance as a male manager is significantly less likely to be promoted and significantly more likely to leave the industry before retirement age.”

  • “This observation is stronger still for female co-managers, who likely get less credit for good fund performance than their male co-managers.”

Three Steps to Combat Glass Ceiling Discrimination

If you believe your company** denied you a promotion to a high-level position because of, for example, your gender, race/national origin, or sexual orientation, what can you do?  If you want to preserve your ability to challenge this glass ceiling in court, you should consider the following options:

  • File a written complaint and follow your company’s policy for submitting internal complaints;

  • You may also want to file a charge of discrimination with the EEOC. Their website has helpful information on how to file the complaint and you can file in person, by telephone, or by mail.  Depending on where you live, your complaint must be filed within 180 or 300 days of the discriminatory act.  If you have any questions about whether the EEOC is the right place to file, use their online assessment center, which will help you decide if the EEOC is the correct agency,

  • Talk about your legal options with an experienced employment law attorney. Given time bars that apply to discrimination claims, it is vital to get the right advice as early as possible in your case.

** If you are a federal government employee or a state or local (city, county) government employee, different complaint filing procedures may apply.  The EEOC’s website has a handy online assessment tool that provides information on how to file a complaint.

What remedies are available if I win my glass ceiling case?

If you win your case at trial or settle with the company beforehand, several types of remedies may be available.  For example:

  • Back pay – the difference between what you should have been paid if promoted and what the company actually paid you;

  • Compensatory damages – damages to address emotional distress, reputational harm, etc. that you suffered as a result of the company’s refusal to promote you;

  • Punitive damages – damages to punish the company if it acted with malice or reckless indifference;

  • Attorney’s fees and litigation expenses; and/or

  • Make-whole relief – placing you into the higher level position you were unlawfully denied.

Importantly, different federal, state and local laws may apply to your case and may allow different types and amounts of damages (Title VII, for example, has a cap on the amount of compensatory and punitive damages you can recover).

© 2017 Zuckerman Law

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About this Author

Eric Bachman, Discrimination Attorney, Zuckerman Law Firm
Of Counsel

Eric Bachman is Chair of the Discrimination and Retaliation practices at Zuckerman Law and has served in senior positions at the U.S. Office of Special Counsel (OSC) and the Department of Justice Civil Rights Division.  Bachman’s wins include a $100 million settlement in a disparate impact Title VII class action, a record-setting Whistleblower Protection Act settlement at OSC, and a $16 million class action settlement against a major grocery chain.  Bachman holds extensive litigation experience, including trials in federal and state courts, and has also set important...

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