Kidder, Peabody & Co. won dismissal of an age discrimination lawsuit the U.S. Equal Employment Opportunity Commission filed against the now-defunct securities firm.
U.S. District Judge John Sprizzo in New York ruled the agency can’t seek damages on behalf of nine former Kidder investment bankers because they agreed to arbitrate their claims out of court.
The commission sued Kidder in 1992, alleging that the New York-based firm fired bankers who were older than 40 and replaced them with younger workers.
Kidder denied the discrimination charges, and argued that the EEOC couldn’t seek damages on behalf of the former employees because they signed agreements mandating that employment disputes be resolved through industry-run arbitration, rather than through the courts.
If the ruling is upheld on appeal, it would weaken the government’s ability to police Wall Street’s compliance with bias laws by barring the EEOC from seeking monetary damages on behalf of employees who sign arbitration agreements, the EEOC said.
Courts have upheld the industry’s practice of making employees and customers give up their right to sue over job or account complaints.
