Women Victors in Bias Suit Seek Tax Law Reform

WASHINGTON (WOMENSENEWS)–Hundreds of women are celebrating their victory today in an historic gender discrimination lawsuit against the U.S. government by lobbying Congress. They are seeking approval of a bill that would average the income from their settlements over the number of years covered by back-pay awards in discrimination cases, rather than imposing taxes on the total award in the year it was received.

The lawsuit against the television and radio news service Voice of America was brought by 1,100 women who applied to work at the service from 1974 to 1984. During that era, Voice of America was part of the U.S. Information Agency.

The women experienced gender discrimination in job application, testing, hiring and promotion. Without admitting fault, the government agreed to settle the case, Hartman v. Albright, in 2000, but it wasn’t until last month that the women received payments totaling $508 million in back pay and interest–the largest known award ever in an employment discrimination case.

While personal injury awards are exempt from federal taxation, discrimination awards are not, and this policy pushes recipients of discrimination awards into the highest income-tax bracket for the year they recover those damages, according to the National Employment Lawyers Association.

The plaintiffs in the Voice of America case were forced to return about a third of their settlement awards to the government because of this year’s payments and now are urging legislators to approve the federal Civil Rights Tax Relief Act. The bill, introduced by Sen. Susan Collins of Maine and U.S. Rep. Deborah Pryce of Ohio, both Republicans, would update the law by permitting individuals receiving back-wage awards to be taxed over the number of years for which the award was designed to compensate, the lawyers’ association says.

“It’s like the government’s fine is reduced by one-third,” says Fran Jacobowitz, who is coordinating the women’s lobbying. “For some of these women, it’s the first and last time they’ll have any money in their lives.

“All we’re asking is to be allowed to average the income over the years it would have been paid out had we been hired,” Jacobowitz adds. “Had each of the women in this class received that pay on an annual basis for the last 20 years, they would have been taxed on about $30,000 a year, which wouldn’t put us into the highest tax bracket.” The women hope to make the new law apply retroactively to January 2002, including themselves in its tax benefits.

While there is no organized opposition to the proposed legislation, and the bill has support from the U.S. Chamber of Commerce and the American Small Business Alliance, it still could fall victim to partisan fights over fiscal responsibility. The prospect of losing even a small amount of revenue may leave Congress wary of authorizing further tax relief following passage of President Bush’s 10-year, $1.35 trillion tax package last year. Other affects on tax revenues are not readily known, since most employment discrimination settlements are confidential.

But even if they fail to gain relief for themselves, Jacobowitz says, they’ll be pleased that their lobbying might bring tax relief for all future settlement winners who experience discrimination and emotional distress due not only to gender, but to race, religious affiliation, age and sexual orientation. Jacobowitz says so far she’s counted more than 100 lobbying appointments made by the women this week.

Complex, Wide-Spread and Long-Standing Discrimination

Dilara Hashem, a Voice of America language broadcaster for Bangladesh, was among those who took part in the suit. “I was vindicated,” she says of the outcome.

Hashem first applied to Voice of America from London, where she worked briefly for the British Broadcasting Company while hoping to enter the United States. Told she was eligible for the next opening, Hashem came to Washington, but found only part-time work at the station, though she saw three less experienced men given full-time positions.

“They sidetracked me,” she says of station officials.

In 1976, Hashem was laid off from her part-time job. She became an American citizen, applied again to Voice of America in 1980 and was told she failed the test. In 1982, Hashem again approached the agency, this time presenting her case to an official with authority over the department she sought to join. He urged her to take the test once again. After this try, she was hired full-time in Voice of America’s Bangla section, where she has worked since 1982. The court awarded Hashem back pay from 1976 to 1982.

Jacobowitz, now executive vice president of a firm raising funds for nonprofits such as the United States Holocaust Memorial Museum, recalls scoring in the top 1 percent on her U.S. Information Agency foreign service examination. Borrowing train fare to get from Washington state to her entry-level interview in Washington, D.C., the then-27-year-old college radio broadcaster and public speaker received a cold welcome.

“Three people interviewed me in a circle, firing questions in an intimidating manner, until I got to the point I was so confused I couldn’t speak. And anyone who knows me knows that’s almost impossible to do,” she laughs.

Other women remember similar humiliation and disappointment.

“No benefits, insurance or job security, but they said that was how they usually hired their full-time people,” recalls Dona De Sanctis. With five years of broadcast experience at Vatican Radio, she found only free-lance work at Voice of America. For a year, she filled out applications for permanent work.

De Sanctis says she applied for every job available–“producer, newscaster, down to intern making $3,000 a year.”

“I was desperate to get any of these,” she says. “I was a widow with a 10-year-old son. I would take these [free-lance] jobs, ‘make soup from stones.’ I never got any kind of response.” Meanwhile, Voice of America published 12 of her radio scripts.

The attorneys “found four solid examples of jobs I applied for where I would have been the logical candidate but I was rejected,” De Sanctis said. In one instance, a young man experienced only as a waiter and mail clerk was hired instead of De Sanctis; his father headed the agency.

The judge reviewing her case in 1998 told De Sanctis the prejudice against her had been blatant.

Today De Sanctis is deputy executive director of the Italian American coalition, Order of Sons of Italy, overseeing its communications and anti-stereotyping campaign.

Hearing Revealed Inside Story

The case was first filed in 1977 by Bruce Fredrickson. Another attorney, Susan Brackshaw, joined the suit in 1980. As partners in the Washington firm of Webster, Fredrickson and Brackshaw, the two worked on the women’s behalf for 20 years without pay.

“Some of the discrimination was overt, some was more subtle,” Brackshaw says. One female television technician experienced in signal compression was rejected in favor of a man who had worked only as a disc jockey at a beach radio station. Women who believed they had failed Voice’s tests learned during the lawsuit they had passed with high scores.

Women named in the lawsuit found the process–though long–enlightening.

“The hearing–that was some experience,” recalls Hashem. “To know the inside story, parts I never knew, everything came to light then.”

De Sanctis agrees.

“That was the real importance of the lawsuit. Everybody has a story but not everybody gets the satisfaction” of winning such a case, De Sanctis says. “This goes on and it’s so insidious. Most of the time you can’t prove it. But the sheer numbers of this case, the 1,100? We are just the tip of the iceberg.”

Suzanne Batchelor has written also for the national science series “Earth and Sky,” WebMD, Medscape Health and the Texas Medical Association’s “Healthline Texas.”