"Glass Ceiling" Lawsuit Takes Aim at German Bank

In January, a group of six female executives filed a gender-discrimination suit against the US subsidiary of a German investment bank, Dresdner Kleinwort Wasserstein (DrKW). The high-powered women claim they were "systematically" turned down for promotions, got less pay for doing the same work as their male counterparts, and were denied access to key deals -- in short, they were unable to break through a "glass ceiling" at their workplace.

The women are asking for $1.4 billion ($1.16 billion) in damages in the class-action suit, reflecting the high-paying nature of investment banking. But while gender-discrimination lawsuits may be commonplace in the US, and are a rapidly growing phenomenon in Britain, in Germany they are rare. This is the case despite statistics showing working women in Germany get as raw a deal as they do elsewhere -- maybe even worse.

Yet it is unlikely German employers will be faced with a slew of high-priced antidiscrimination suits any time soon. According to Ute Sacksofsky, a legal scholar at the University of Frankfurt who specializes in constitutional law and gender studies, there are a number of reasons for this.

Discrimination not an outrage

First, compensation damages paid out in Germany tend to be much lower than in the United States, so there is less financial motivation to bring a law suit, Sacksofsky said. Secondly, Germany doesn't have a jury system, where jurors decide the amount of damages that get paid out. Rather, damages are awarded based on an existing civil code and a judge decides the amount to be paid.

"The law says payment has to be 'commensurate' with the damage done and this is almost always much lower in Germany than in the United States," Sacksofsky said.

That goes for all kinds of tort cases, not just discrimination, she added.

A less tangible, but perhaps equally powerful, factor is that "sex discrimination culturally is still not generally viewed as something outrageous," Sacksofsky said. "Many people have the feeling that it is the absolute right of the employer to choose who they want to promote, that they should have that autonomy. It goes back to our concept of Vertragsfreiheit, or contractual freedom."

A final reason may be that, with so little support for sex-discrimination suits, "people might feel such an action would terminate their chances on the job market," she added.

In addition to complaints about unequal pay and lack of promotion, the DrKW suit includes descriptions of sexual advances, belittling comments about maternity leave, and the plaintiffs' claim that meetings would sometimes end with a visit to a strip club, effectively preventing the women from taking part. The company has said many of the claims were irrelevant to a sex-discrimination case, and were simply stated to damage the image of the firm.

Statistics back up 'leaky pipeline'

Whether or not such anecdotes are true, it is not hard to come by statistics that support the existence of a glass ceiling. There is an average pay gap of 16 percent between men and women across the EU, according to statistics agency Eurostat. And a 2004 study done for Stern magazine showed an average gender-pay gap of 24 percent in Germany -- worse than in any other European country.

Meanwhile, the well-known "leaky pipeline" effect -- where large percentages of women start out at the lower echelons of a business, but somehow drip out of sight before making it to the top -- is evident throughout business in Germany and Europe, as well as the US.

In DrKW's capital-markets division, women hold 60 percent of all administrative jobs, but they make up only 20 percent of vice presidents, 13 percent of directors, and 2 percent of managing directors, lawyers on the case told Manager Magazin.

Model companies

Beate Winterer of the organization Total Equality said there is no question that there is a glass ceiling in Germany. "Look at the number of women in leading positions in German companies," she said. But, she noted, "Germans are not as likely to take things to court."

According to Winterer, Total Equality was created as a means of rewarding those companies that do give women a better chance. In deciding who to present with a certificate, the group looks at things like whether a company offers mentoring programs for women, flexible work hours, and what the company does to help women manage work and family.

According to Winterer, companies do not implement such measures to be nice, but because it helps them compete in the long run.

"They recognize that there are highly qualified women, and they have to give them a chance to get to the top," she said. "And it helps their image, both inside and outside the firm."