Merrill still ignores decree to hire more women.

FROM complaint hotlines to diversity programs, Merrill Lynch & Co. has done plenty to battle the woman problem that dogs Wall Street. But for all its efforts, the world's biggest securities firm has seen negligible results in its hiring of women as stockbrokers. And now Merrill is watching the issue come alive again in a battle that's shedding light on glitches in the system.

It's happening in testimony at the arbitration hearing of discrimination charges filed by Nancy Thomas, a former broker at Merrill for close to 18 years.

Thomas and seven other class representatives negotiated the resolution of Cremin vs. Merrill Lynch, a class-action discrimination lawsuit that was settled in 1998 without providing any money to be shared by the 912 female brokers who filed claims.

Instead, the women accepted a dispute resolution process that, under some circumstances, could lead to arbitration. About 860 of the 912 claims resolved by Merrill in private negotiation and mediation never got to the point where the public could hear their stories. Thomas is an exception.

Arbitrators in the Thomas hearing have scheduled 18 more sessions--from Dec. 20 to July 2005--to determine whether she has a case. The testimony 1 heard from Sept. 13 to Sept. 30 provides a rare window into what Merrill did--and didn't do--when women alleged discrimination at the firm.

Thomas Wessels, a former boss of Thomas, testified that he hadn't been aware of several allegations against him. Frank Collins, a branch manager who retired in 1995, had learned about two claims against him only during the September preparation for his testimony. The existence of three others came as a surprise in the course of the Thomas hearing.

Ralph DeSalvo, who was Thomas's boss from 1997 to 2000, did know that he had been the subject of a retaliation claim by eight women, including Thomas. But DeSalvo said he had not seen a copy of the actual discrimination charge Thomas filed against Merrill Lynch--even though the filing bore a Merrill Lynch "received" stamp of Jan. 29, 1997, a time when he was working as branch manager.

"This specific document I did not see," he said. In it, Thomas had put Merrill "on notice of class-wide allegations of unlawful sexual discrimination and retaliation."

You don't show this to the branch manager?

Merrill took action to address some of Thomas's complaints. They conducted an investigation after someone left her a package in the mailroom with a dildo, lubricating cream and an obscene poem in 1991. They had a postcard removed in 1993 from the cubicle of Thomas's assistant that showed a bare-chested woman.

The gender issue was much on the minds of Merrill managers in 1982 when Thomas arrived--or at least it should have been. The Equal Employment Opportunity Commission had entered a consent decree with Merrill in 1976 related to the initial complaints of Helen O'Bannon, who earned a master's degree in economics at Stanford University and was passed over for a broker's job in favor of a college dropout and a former gas station attendant, among males who were picked.

In 1984, two years after Thomas started at Merrill, the firm signed a new consent decree extending to 1989 because it hadn't met its quotas.

Did Collins, Thomas's manager from 1982 to 1986, remember discussing the objective of hiring women with anyone at the firm?

No. Did he remember filing paperwork that had to do with the O'Bannon case? "None that I filed, no."

On July 30, 1984, Thomas Smith, Merrill's vice president and counsel, signed a decree that set a goal for the hiring of female account executives in each of the years 1984 through 1988 at 25 percent. Merrill never met that goal.

Merrill Lynch spokeswoman Selena Morris says the highest percentage of women ever in one of the company's training classes was 20 percent. As for full-fledged brokers, today, 15 percent of Merrill's 14,000 brokers are women. That's the same share that women made up when they sued Merrill Lynch in 1997.

Susan Antilla, author of "Tales from the Boom-Boom Room: The Landmark Legal Battles That Exposed Wall Street's Shocking Culture of Sexual Harassment," is a columnist for Bloomberg News.