CHICAGO -- Moody's Investors Service will file objections to a U.S. magistrate's recommendation to certify as a class action a racial discrimination lawsuit brought against the rating agency by black and Hispanic employees.

Michael Delikat, an attorney representing Moody's, said yesterday that the rating agency has until July 22 to file the objections with U.S. District Court Judge Whitman Knapp, who must ultimately rule on whether or not the suit is to be certified a tass action.

On June 30, magistrate James C. Francis 4th recommended the certification, based on statistical and anecdotal evidence submitted by the five current and former Moody's employees, all of them black or Hispanic, who filed the discrimination suit in December 1992.

Delikat said some of the rating agency's objections will focus on the question of whether specialized employees, such as analysts, should be excluded from the class if the suit is deemed a class action. Moody's argued for exclusion, but the magistrate disagreed.

Delikat said the plaintiffs hold support-type positions at Moody's. "They don't have the skills or training to perform any analyst function, which is a big part of what Moody's does," Delikat said. "I can't imagine any of the people aspire to those positions unless they go back to school and get an MBA and be trained as a analyst."

In his report to the judge, Francis wrote that the rating agency "has not yet shown that all analyst career track positions are so specialized that occupants of or aspirants to such positions should be excluded from the class." However, the magistrate said, if Moody's were able to prove that contention during the trial, the court could modify the class to exclude those employees.

Leonard Harem, the attorney for the employees, hailed Francis' recommendation as a "clear-cut victory" for his clients' case, which charges that Moody's has "engaged in a series of unlawful employment acts and practices that have resulted in the disparate adverse treatment" of black and Hispanic employees. The suit alleges that the employees were demoted, passed over for promotions, or denied transfers to jobs that could lead to opportunities for promotion.

Moody's has denied the allegations, which the rating agency's attorneys have called groundless.

It is not unusual for discrimination cases to be certified as class actions, Delikat said. If the lawsuit against Moody's is certified, he said there will be future opportunities in court to withdraw the certification.

As defined by the plaintiffs, the class would contain blacks and Hispanics who work at Moody's or who worked there between Dec. 18, 1989, and the date of the trial, and who were denied one or more promotions even though they were in promotable positions and received satisfactory performance evaluations.

So far 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. But if the lawsuit becomes a class action, Flamm has said, municipal finance department employees could also be included.

Once the objections are filed, the plaintiffs will have until Aug. 1 to respond to the objections, Delikat said. A ruling from the judge on the certification may not come until September, he said.

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