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WAJDA v. PENN MUT. LIFE INS. CO.

December 15, 1981

Joanna R. WAJDA
v.
The PENN MUTUAL LIFE INSURANCE COMPANY



The opinion of the court was delivered by: LUONGO

SUR PLEADINGS AND PROOF

Plaintiff, Joanna R. Wajda, charges that defendant, The Penn Mutual Insurance Company (Penn Mutual), discriminated against her in employment on account of sex in violation of Title VII of the Civil Rights Act of 1964. 42 U.S.C. § 2000e, et seq. Specifically, plaintiff contends that she was illegally denied promotional and job opportunities and ultimately was terminated from her employment on account of her sex. In addition, plaintiff contends that her termination from employment and other adverse employment actions taken against her, were in retaliation for her filing of a claim of employment discrimination with the EEOC and the instant civil action. *fn1" 42 U.S.C. § 2000e-3.

 By agreement the trial was bifurcated, with the issue of liability to be tried first and the question of remedy to be tried, if necessary, at a later date. The liability phase was tried from November 2-9, 1981. Following completion of the evidence, the parties submitted requests for findings of fact and conclusions of law. On pleadings, proof, and the written submissions of the parties, I make the following

 FINDINGS OF FACT

 1. Joanna R. Wajda began working for Penn Mutual as a clerk in January 1940 following graduation from Frankford High School in Philadelphia, Pennsylvania. From then until she was terminated from the company in July 1981, she held a variety of jobs with Penn Mutual ranging from clerical and secretarial positions through Senior Investment Analyst.

 2. The Penn Mutual Insurance Company is engaged in various aspects of the insurance business. Its corporate headquarters are located in Philadelphia, Pennsylvania.

 3. During the course of her employment with Penn Mutual, Wajda took courses at the University of Pennsylvania Evening School of Accounts and Finance from 1946 to 1952, when she received a certificate of proficiency with honors. Among the courses she took were courses in accounting and rudimentary courses in economics and finance. (Exhibit P10).

 4. In 1952, following receipt of her certificate of proficiency, Wajda was offered a position with the Fire Association of Philadelphia. Wajda, who had theretofore worked as a secretary, rejected that offer when Penn Mutual offered to promote her to the position of investment assistant to Albert Cederstrom, head of the Direct Placement and Corporate Loan Division of Penn Mutual's Securities Department. Wajda's work in this capacity consisted of compiling financial data regarding companies which sought loans from Penn Mutual. Wajda did limited analysis of the prospective companies solely from a maintenance standpoint, i.e., she checked for assurance of payment of interest and repayment of principal. Wajda remained in the Securities Department until November 1980, working in a number of that department's divisions.

 5. Starting in 1952, Wajda resumed her course work at the University of Pennsylvania Evening School of Accounts and Finance and, in 1959, received an associate degree in business administration with honors. In her course of study, Wajda took one course in Financial Analysis in 1952-1953. (Exhibit P10). She has not taken any formal course work in finance since that time.

 6. On September 11, 1973, Wajda filed charges with EEOC alleging that she had been discriminated against by Penn Mutual in salary and promotions because of her sex. Wajda's claim of discrimination is based upon her employment in the Securities Department of Penn Mutual. The charge was deferred by EEOC to the Pennsylvania Human Relations Commission.

 7. Penn Mutual's Securities Department is responsible for investing the Company's assets profitably in various types of ventures. The investments run into hundreds of millions of dollars. The Securities Department as it existed prior to January 1, 1981, was divided into four divisions:

 (a) Equity Investment (responsible for managing the Company's common stock portfolio, which has assets of over $ 185 millions). This division will hereinafter be referred to as the "common stock" division.

 (b) Fixed Income Investment (responsible for investing in and managing the Company's corporate bonds and preferred stocks. In addition it also is responsible for making direct placements to utility companies. This division has assets of over $ 700 million).

 (c) Private Placement (responsible for negotiating multi-million dollar private loans to industrial corporations, other than utilities. It has over $ 800 million in assets). This division will hereinafter be referred to as the "direct placement" division.

 (d) Treasury/Administrative (responsible for performing money and banking transactions for the entire Company, plus administrative and personnel functions for the Securities Department).

 8. In the late 1950s, while still working primarily in direct placement under Cederstrom and later Edward J. Klinger, Wajda began assisting Henry Baggs, financial secretary, on the trading of common stocks. In addition, during this period Wajda assisted Cederstrom in preparing data for submission to the National Association of Insurance Commissioners' (NAIC) evaluation system, which analyzed the investments made by American insurance companies. Cederstrom retired in the early sixties and was replaced as financial vice president by Floyd Starr, for whom Wajda continued her NAIC work. During this time Wajda remained as an investment assistant and her job was in the non-exempt category. In 1968, as part of a company-wide re-evaluation of jobs, Wajda's position was upgraded to an exempt category job. *fn2"

 A. Common Stocks

 9. In 1965 Wajda was given the function of trading common stocks in the Equity Investment division, working under Henry Baggs, financial secretary. Baggs had joined the Company in the fifties and was in charge of the common stock operation. Wajda's responsibility in the common stock area was limited to executing buy and sell orders within price limits fixed by Baggs who had the ultimate decisionmaking responsibility. Before Wajda, this task had been performed by Charles Butler, who was assistant treasurer and a Company officer. In addition to his common stock trading duties, Butler also had some responsibility for department personnel and the trading of commercial paper. When Butler was promoted to treasurer, Wajda assumed only the trading of common stock function and she was not promoted to assistant treasurer.

 10. During the 1950s and 1960s, Penn Mutual followed what can only be characterized as a conservative investment policy, relying primarily on low yield, low risk investments in which the major consideration with respect to investments in loans was assurance of payment of interest and repayment of principal. Concomitantly, the Company's common stock portfolio was relatively small and consisted of relatively safe investments.

 In or about 1972, Frank Tarbox became president of Penn Mutual and implemented a new policy favoring an aggressive investment posture. For example, insofar as direct placement loans were concerned, the Company concentrated on obtaining "equity kickers", in which the Company sought not only payment of interest and repayment of principal, but also an ownership interest in the corporations to which loans were made. Additionally, the Company increased four-fold its common stock portfolio. Existing managerial personnel, who for the most part came up through the ranks and lacked formal investment education and experience in aggressive investment management, were ill suited to these changed investment objectives.

 11. Despite the importance of the Securities Department in the Company, it has been operated with relatively few personnel, ranging from 10 to 14 exempt (non-clerical) employees from 1970 to 1980. Because of the high degree of skill required as a result of the changed investment objectives in the early 1970s, Penn Mutual began to hire either persons experienced in portfolio management or college trainee applicants with the potential (as manifested by their education) to fill investment officer positions. College trainees were required to have a bachelor's degree in finance, economics, or accounting, and were expected to continue with their education upon joining the Company.

 13. The purpose of the college trainee program was to identify and train those persons who had the potential to move up Penn Mutual's corporate ladder. In the Securities Department the progression was as follows: college trainee, investment or security analyst, assistant investment officer, investment officer, 2d vice president, and so on. This progression was not automatic, and was not simply a function of length of tenure. Before reaching another rung of the ladder, a person had to show that he or she was capable of assuming increasingly more significant levels of responsibility.

 
(a) Before being promoted from a security analyst to assistant investment officer in direct placements the person seeking promotion had to have demonstrated that he or she had the ability to analyze, structure, negotiate, and manage deals on his or her own.
 
(b) In the common stock area it was essential that the person show that he or she had the ability to make decisions on buying and selling stocks and had the ability to manage portfolios before he or she could be promoted to assistant investment officer.
 
(c) Before a promotion to assistant investment officer would be granted in either common stocks or direct placements, it was expected that the analyst increase his or her academic qualifications by obtaining either a Master of Business Administration Degree (MBA) in either finance or economics or take courses toward professional certification as a Chartered Financial Analyst. Every person promoted to assistant investment officer in direct placements or common stocks from 1972-1980 had at least a bachelor's degree and had taken steps to acquire an advanced degree.

 14. As part of Penn Mutual's policy to upgrade its personnel in order to prepare for its change to a more aggressive investment posture, Edwin W. Crysler, Jr. was hired as Assistant Vice President-Securities on January 1, 1972. Crysler came to Penn Mutual with vast experience in the investment field. He is a Chartered Financial Analyst and a past-president of the Financial Analysts Association. Prior to joining Penn Mutual, Crysler had been an officer with Wellington Management Company where he was in charge of the purchase, sale and management of fixed income investments.

 15. As Assistant Vice President at Penn Mutual, Crysler had responsibility for investments in fixed income bonds and direct placements in public utilities. *fn4" Shortly after he arrived at Penn Mutual, it became evident that Baggs was near retirement and William H. Loesche, Vice President-Securities and Corporate Treasurer, requested that Crysler assist Baggs in the common stock function with the goal that Crysler would ultimately assume full responsibility for that area in addition to other areas for which he had responsibility.

 17. In August 1973, Carl M. Lindberg was hired as an investment officer to assist Hoffman and to manage two smaller common stock portfolios on his own. Lindberg had vast portfolio management experience having previously been employed in various portfolio management capacities by Drexel Burnham (and its predecessor Drexel Firestone), Brown Brothers-Harriman, and a wealthy private investor. (Exhibit D16). Lindberg received an AB degree in Economics from the College of William and Mary in 1962.

 18. Crysler did not consider Wajda for the position filled by Hoffman since she lacked the educational background and her trading experience at Penn Mutual did not provide the requisite experience in portfolio management. I find that Wajda was not qualified for portfolio management in common stocks as she lacked both the educational background and the ability to analyze markets and stocks, essential for that position. Her experience as a trader of common stocks, which consisted of implementing other's decisions, did not equate to the ability to analyze complex market investments. Wajda admitted that she was not qualified for portfolio management.

 19. Similarly, for the reasons stated in Finding 18, supra, Wajda was not qualified for the management portfolio position filled by Lindberg.

 20. In Spring of 1972, after Hoffman was hired, Wajda complained to Financial Vice President Allen C. Thomas about her perceived lack of upward mobility in the common stock area. She informed Thomas that she desired to return to the direct placement area where she had worked prior to 1965, and which she perceived as providing the greater opportunities for career advancement. In April 1973 she repeated her complaints and request to Loesche who had replaced Thomas as Financial Vice President. Nothing came of either request.

 21. Wajda went to EEOC in June 1973 and for the remainder of that summer worked on preparing her charge of sex discrimination and contemplated whether to actually file the charge.

 22. In August 1973, prior to the time she reached a decision on whether to file a charge, and before anyone in management at Penn Mutual had knowledge that she was contemplating filing a charge, Wajda had a discussion with Crysler who had recently assumed responsibility for the common stock function. Again Wajda complained of her perceived lack of upward mobility in common stocks. Crysler, recognizing Wajda's undisputedly faithful and efficient service to Penn Mutual since 1940, agreed to attempt to get her additional pay for the trading work she was undisputedly doing in an excellent and efficient manner.

 23. Upon receipt of Crysler's request for a salary increase for Wajda, the personnel department surveyed other insurance companies and found that Wajda's pay for her job as trader was competitive with that paid by other firms for the same work. Personnel concluded that unless Wajda was given additional responsibilities, she would not be entitled to an increase in salary. Crysler and Richard F. Yoder, treasurer, who was in charge of the department's personnel, decided to expand Wajda's job to include equities research and analysis in addition to her trading function. The application for promotion was resubmitted to, and approved by, the personnel department.

 24. Although, after she had her discussion with Crysler, Wajda had some doubts about whether she should file her EEOC charge, she ultimately decided to go forward and, on September 11, 1973, she presented the charge to the EEOC, which deferred to the Pennsylvania Human Relations Commission for sixty days as required by law.

 25. In November 1973, Crysler informed Wajda that she was promoted to "Equity Research Analyst and Trader", a position which resulted in Wajda's going from a C to F (a higher) level exempt employee.

 26. In the course of obtaining approval of Wajda's promotion, Crysler learned, to his surprise, that Wajda had filed a charge with EEOC. I find that the decision to promote Wajda was unrelated to her filing sex discrimination charges since Crysler's decision to try to improve Wajda's position was made well before he or anyone else at Penn Mutual learned of Wajda's charge. The reason for the delay between the time that Crysler first went to personnel and the time that Wajda was actually promoted resulted from first, the time required for surveying other insurance companies to determine whether Wajda's salary for the trading function ...


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