CHICAGO -- Attorneys for Moody's Investors Service filed objections on Friday to a U.S. magistrate's recommendation to certify a pending racial discrimination lawsuit as a class action.
The agency's objections, which were filed in the U.S. District Court for the Southern District of New York, include the claim that the specialized nature of analytical work at the rating agency precludes the plaintiffs from forming a class.
The five current and former black and Hispanic Moody's employees who filed the lawsuit in 1992 were all in support positions and were not necessarily eligible for promotions, Moody's said.
"None of them have had the experience or training required for evaluating the risk and investment significance of financial, economic, organizational, and political data, which is the essential function of the jobs in financial analysis that produce the investment ratings backed by Moody's reputation and relied upon in the marketplace," the filing said.
Moody's also said that its decision-making process for promotions is not centralized, but rests with individual managers.
The lawsuit charges Moody's with discrimination against blacks and Hispanics, claiming those employees were denied promotions. Moody's, which has denied the charges, is fighting a June 30 recommendation by magistrate James C. Francis 4th that the lawsuit be certified as a class action based on statistical and anecdotal evidence submitted by the five black and Hispanic plaintiffs and also by affidavits from other Moody's employees.
The recommendation and objections were made to U.S. District Court Judge Whitman Knapp, who must ultimately rule on whether or not the lawsuit proceeds as a class action.
Michael Delikat, an attorney for Moody's, said the plaintiffs have until next week to file a response to Moody's objections. He said it could be September before Knapp rules on the class certification.
Leonard Flamm, an attorney representing the plaintiffs, did not return phone calls. Flamm has characterized the magistrate's recommendation as a "clear-cut victory" for his clients.
The plaintiffs have identified about 78 potential members of the class, most of them in the rating agency's corporate finance and financial information services departments. If the lawsuit is certified as a class action, Hamm has said the number could increase and could include municipal finance department employees.
As defined by the plaintiffs, the class would comprise blacks and Hispanics who now work at Moody's or who worked there between Dec. 18, 1989, and the date of trial, and who were denied promotions even though they were in promotable positions and received satisfactory performance evaluations.