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BRODERICK v. RUDER

May 13, 1988

Catherine A. Broderick, Plaintiff,
v.
David S. Ruder, Chairman, United States Securities and Exchange Commission, Defendant



The opinion of the court was delivered by: PRATT

 JOHN H. PRATT, UNITED STATES DISTRICT JUDGE

 Trial of the above-captioned matter took place from June 22, 1987 through July 1, 1987. In addition to the oral testimony of some twenty-five (25) witnesses, there has been extensive discovery on both sides in the form of depositions and documents. The matter has been fully briefed. On the basis of the foregoing submissions, the Court enters the following Findings of Fact and Conclusions of Law.

 Findings of Fact

 The Parties

 1. Plaintiff, a 35 year-old white female, is currently employed as a staff attorney in the Division of Corporation Finance of the Securities and Exchange Commission ("Commission" or "SEC"). She has been continuously employed as a staff attorney since August 12, 1979, a period of more than eight years. She filed this action on June 30, 1984, pursuant to Title VII of the Civil Rights Act of 1964 ("Title VII"), 42 U.S.C. ยง 2000e-16, et seq., asserting two causes of action. These are, 1) that defendant is responsible for creating and refusing to remedy a sexually hostile work environment at the Washington Regional Field Office ("WRO") of the SEC, and 2) that plaintiff's supervisors at the WRO retaliated against her for opposing actions of the WRO's management that she considered to be illegal under Title VII.

 2. Defendant, David S. Ruder, is Chairman of the SEC, having succeeded John S.R. Shad, who was Chairman during the events in controversy. Mr. Ruder is sued in his official capacity.

 3. The SEC is a government agency charged, inter alia, with the regulation and enforcement of the federal securities laws, among them the Securities Act of 1933 and the Securities Exchange Act of 1934. The SEC's functions are exercised through several field offices, including the WRO located in Arlington, Virginia.

 The Organizational Structure of the WRO Was Organized

 4. At all times in question, the WRO, a small branch of the SEC, was organized into two main parts: 1) the Regulation side, responsible for reviewing corporate filings and conducting examinations of broker-dealers and investment advisors, and 2) the Enforcement side, responsible for investigating possible violations of the federal securities laws, such as insider trading. The Enforcement and Regulation Divisions were further sub-divided into branches. Prior to 1980, the WRO Enforcement Division contained two branches. In the fall of 1980 a third enforcement branch was created.

 5. The chief executive of the WRO was the Regional Administrator. He had three immediate subordinates, each an Assistant Regional Administrator ("ARA"): two worked in the Enforcement Division in the Arlington and Philadelphia Offices, respectively, and one worked in the Regulation Division. There was also a Regional and a Senior Trial Counsel responsible for civil litigation and administrative proceedings.

 6. Paul Leonard ("Leonard") was Regional Administrator of the WRO from 1976 until he retired in August 1985. James C. "Cliff" Kennedy ("Kennedy") was ARA for Enforcement in Arlington from 1976 until May 1986. John L. Hunter ("Hunter") was a branch chief in the WRO from 1976 until September 1980, when he became Senior Trial Counsel. In September 1982 he became Regional Trial Counsel, a position that he held until May 1986. Herbert Brooks ("Brooks") became ARA for Regulation in late February 1981 and held that position until May 1986. *fn1"

 Plaintiff's Work History at WRO - August 12, 1979 to September 1984

 7. Plaintiff was first employed on August 12, 1979 as a Civil Service Grade 12, step 3, staff attorney. Ms. Broderick's educational qualifications included a Bachelor's Degree with honors from Carnegie Mellon University, a Master's Degree in English, and a Law Degree from the New York University School of Law. Additionally, Ms. Broderick has completed half the requirements for a Master's Degree in Securities Law at Georgetown University. Ms. Broderick is admitted to practice law in both New York and the District of Columbia. While a student, she clerked for the Honorable John R. Bartell of the United States District Court for the Eastern District of New York. She also clerked for the United States Attorney's office for both the Southern and Eastern Districts of New York.

 8. Plaintiff served as a staff attorney in the Enforcement Division from August 1979 until September 1984, when she was transferred to the Division of Corporation Finance. During this entire period she received one promotion to grade 13, step 1. Because of her length of service, she met the eligibility qualifications for promotion to grades 14 and 15.

 9. During her five years of service with the Enforcement Division, plaintiff served under the following immediate supervisors for the periods indicated:

 
John Hunter, branch chief, for one week in August 1979
 
Richard Wachterman, branch chief, August 1979 to November 1980, when he left the SEC
 
Terry Miller, branch chief, December 1980 to August 1981
 
Hilton Foster, branch chief, shortly after August 1981 to August 1984, when plaintiff was transferred to the Division of Corporation Finance

 10. Mr. Wachterman testified that plaintiff worked on one large insider trading case, that her work was substandard, that she took an excessive amount of time to complete her assignments, and that she did not take kindly to criticism. The negative effect of Mr. Wachterman's testimony was substantially undermined by the fact that he, in recommending plaintiff for promotion to GS-13, stated, inter alia, that "in all her work, she demonstrated a high level of professionalism, especially in her ability to express herself orally and in writing." The memorandum also stated that "Ms. Broderick assumed primary responsibility for a significant part of this investigation. She assimilated a mammoth record which had previously been developed, pursued investigatory initiatives on her own, and wrote a memorandum recommending enforcement action. Her effort in this case has substantially furthered the investigation."


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