The federal government is increasingly targeting the financial services industry with employment discrimination investigations.

The Department of Labor, charging NationsBank Corp. with discriminating against minority employees in Charlotte, N.C., petitioned an administrative law judge last Friday to bar the company from serving as a government contractor.

Also Friday, the Equal Employment Opportunity Commission charged that Freddie Mac had failed to stop white employees from harassing minority members at the mortgage agency's McLean, Va., headquarters.

NationsBank and Freddie Mac denied the charges, which were the latest in a series of filings against financial services providers.

During the past year, the Labor Department alone has sued Provident Bancorp in Cincinnati, Security Bank in Milwaukee, and First Financial Bank in Stevens Point, Wis.

In addition, individual employees have filed scores of employment discrimination complaints and activists have begun raising employment issues in Community Reinvestment Act protests.

"We are seeing signs of more aggressive rhetoric and action toward the financial services industry," said Jo Ann S. Barefoot, a partner at the consulting firm KPMG Barefoot Marrinan. "This is something banks should be paying a lot of attention to."

"There is a lot of legal activity in this area," agreed Deval Patrick, formerly assistant attorney general for civil rights and now a partner at Day, Berry & Howard in Boston. "The size of recent settlements and judgments reflects the impatience that employment discrimination is still being dealt with so late in the 20th century."

Anti-discrimination laws pose particular problems for banks, which must deal with Labor, the EEOC, and the Justice Department.

All three agencies derive their power from Title VII of the 1964 Civil Rights Act and from the Americans with Disabilities Act, which together outlaw bias on the basis of race, sex, religion, national origin, and physical disabilities.

The EEOC has carte blanche authority to sue. Anyone may ask it to intervene in a dispute alleging a company either discriminates in its hiring and promotion practices, or allows employees to create a hostile working environment for minority employees.

The Labor Department's jurisdiction is more limited, stemming from an executive order during the Nixon administration that requires government contractors to follow affirmative action plans. Labor defines all banks, thrifts, and credit unions as government contractors because they have deposit insurance.

The Justice Department's jurisdiction is narrow: it may prosecute only cases referred by the Labor Department. But its punch also is the most potent because it brings cases directly in federal court, which means it may recoup punitive damages.

In the NationsBank case, the Labor Department charged the bank discriminated against 1,500 minorities who applied for entry-level clerical and administrative posts.

The investigation, begun in 1994, initially focused on NationsBank offices in four cities. The focus narrowed to Charlotte in 1995 when NationsBank sued the government, claiming the broad probe was unconstitutional.

The Labor Department asked the court to force NationsBank to reimburse bias victims and strip the bank of its government contracts, including the ability to sell savings bonds and serve as a depository for government funds. The agency has not threatened to revoke the bank's deposit insurance.

"This case reflects our commitment to protect the nation's workers at all levels," said Carol A. Gaudin, the Atlanta region administrator for Labor's Office of Federal Contract Compliance Programs.

NationsBank spokesman Richard Stilley said the complaint is intended to pressure the bank into dropping its suit.

"These are technical, legal disputes," he said. "They have nothing to do with the nearly 30,000 minority associates who work at NationsBank, nor do they have anything to do with the qualified people who would like to apply for jobs at NationsBank."

The EEOC's claim in the Freddie Mac case stems from several incidents last spring when someone distributed a printout of a racist E-mail and vandalized parts of several offices with offensive graffiti. The agency separately is conducting a broad review of Freddie Mac's employment practices.

Candice Mendenhall, Freddie's senior vice president for human resources, said management was dumbfounded at the filing of the complaint.

"Freddie Mac has had a long history of absolutely no tolerance of any form of discrimination," she said. "These were the results of one or two sick individuals in our organization."

Ms. Mendenhall said the institution has hired a private investigator to track down the perpetrators and has held frequent discussions with the EEOC to resolve the dispute.

"We have been fully cooperating," she said. "For them to be taking this kind of overt action against us is very surprising and alarming."

Ms. Mendenhall said she believes the agency is targeting financial institutions because they are high-profile institutions with deep pockets.

"They believe financial institutions have not made as much progress in terms of minority representation and people under employment as manufacturers have," she said.

More trouble could be on the way from civil rights groups, which helped orchestrate a record $176 million employment discrimination settlement this year with Texaco.

"This is potentially a very serious problem," said Richard Ritter, a consultant with the Washington Lawyers Committee for Civil Rights and Urban Affairs.

"The more I look at the disproportionately small number of minorities employed in really important jobs at banks, the more I realize that there seems to be a statistical imbalance."

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