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What Counts as Race Discrimination? A Suit Against JPMorgan Is a Test

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Over 18 years of working as a secretary at JPMorgan Chase, Wanda Wilson had learned to brush aside remarks directed at her race.

“Wanda, do you mind if I tell a Black joke?” a colleague once asked her. Another co-worker told her that she disliked Black people in general but made an exception for Ms. Wilson.

Ms. Wilson saw no reason to complain. JPMorgan had been a good employer, giving her opportunities to rise through the secretarial ranks and providing assistance during a fraught time in her personal life. She felt proud defending her career to her family, which included several prominent civil rights activists. (Her mother is the poet Amina Baraka, and her stepfather was Amiri Baraka, the playwright and poet. Her younger brother is Ras Baraka, the mayor of Newark.)

But things soured in 2016 after a new colleague began to bully Ms. Wilson and order her around, according to a lawsuit Ms. Wilson filed against JPMorgan and its chief executive, Jamie Dimon. For the first time, Ms. Wilson felt that she was not on equal footing with her white colleagues, according to the suit. She complained to JPMorgan officials, but the bank’s response shattered her faith in her employer, she said. After she was unable to find a different job within JPMorgan, the bank fired her. She then sued, alleging race discrimination and retaliation and seeking an unspecified amount in damages.

JPMorgan said its officials had done everything in their power to make things right for Ms. Wilson. “The firm denies that it engaged in any race discrimination or harassment or retaliation with respect to Ms. Wilson’s employment,” said Joe Evangelisti, a JPMorgan spokesman.

The bank tried to have the lawsuit, filed in 2018, dismissed. This month, a judge ruled that the two sides should engage in mediation instead.

Wall Street has come under growing scrutiny for how it treats people of color, and Black employees in particular. Last year, The New York Times detailed allegations of racism at Phoenix-area branches of JPMorgan. Recently, a former head of global diversity at Morgan Stanley, a Black woman, sued the bank for discrimination.

ImageTwo Black employees at JPMorgan said race was a constant undertone in their interactions with non-Black employees.
Credit…Seth Wenig/Associated Press

But while such cases claim broad and systemic discrimination involving banks, Ms. Wilson’s lawsuit tells the complicated story of interactions between co-workers that can carry racist undertones. It shows how allegations of racism in a workplace can be difficult to verify, even when a company conducts an investigation. That’s especially so in the absence of explicit language or actions — such as a racial slur or blackface — that are easily identifiable as racist.

“This isn’t the ’60s or the ’50s,” said David Carlor, a financial adviser who is Black. “No one’s going to tell you: ‘Because you’re Black, go get us coffee.’ You’re just going to find that you’re the one that’s being treated most disrespectfully in the office.”

At JPMorgan, Ms. Wilson was often the first to arrive and the last to leave, according to three of her former colleagues, who spoke on the condition of anonymity. She got lunch and coffee for her superiors and ran errands that seemed well outside her job description, like buying a mirror for her boss’s office.

In March 2016, Ms. Wilson joined the audit department as an executive administrative assistant — a coveted position among secretaries because it involved handling duties for one senior executive in that department.

Around the same time, Janet Jarnagin was also assigned to Ms. Wilson’s boss as a team leader. A midlevel executive, Ms. Jarnagin’s duties included helping the audit department prepare presentations and reports, according to a publicly available résumé.

Over the next few months, Ms. Jarnagin began ordering Ms. Wilson to hang coats, get coffee and lunch, or carry out requests — such as making photocopies — by visitors to the department, according to the lawsuit.

Once, Ms. Jarnagin stood up from her desk and announced that she was “sending Wanda out for coffee,” asking if anyone else wanted to place an order with her. Other Black secretaries who had overheard Ms. Jarnagin later teased Ms. Wilson about being treated like Kizzy, an enslaved character in the book and television mini-series “Roots.”

Ms. Wilson said that she asked Ms. Jarnagin not to use the term “sending” any more, but that Ms. Jarnagin ignored her. Ms. Wilson described the incident in a 2017 interview with a JPMorgan official, a recording of which she provided to The Times.

In her lawsuit, Ms. Wilson described how Ms. Jarnagin had been making these demands only of her — the lone Black secretary in the vicinity. She tried to distance herself. When she rearranged her desk so that the two women no longer had an unobstructed view of each other, Ms. Jarnagin mocked her for trying to build a “Mexican wall” out of a stack of folders on her desk, according to the lawsuit.

Ms. Wilson complained about Ms. Jarnagin to their boss, who told her to work things out on her own, according to the complaint. She then told a human resources representative that Ms. Jarnagin was ordering her around and bad-mouthing her work. JPMorgan’s Mr. Evangelisti said the bank had begun investigating Ms. Wilson’s complaints immediately.

Credit…Chang W. Lee/The New York Times

Henry Klingeman, a lawyer for Ms. Jarnagin, dismissed the allegations. “In the high-intensity, high-stress world of New York banking, Janet was no more rude than a male employee who is assertive,” he said in an email. “That she asked an administrative assistant to get coffee for senior management is one of the criticisms made against her. There is nothing to this, much less implied racism.”

Ms. Wilson eventually emailed Mr. Dimon: “I have followed the chain of command and have not received any assistance.” Mr. Dimon did not personally respond, but her complaint was promptly shared with senior bank officials who stepped up their investigation.

Bank officials interviewed people in the immediate vicinity of Ms. Wilson and Ms. Jarnagin, two people familiar with the investigation said. The investigators determined that Ms. Jarnagin had behaved rudely toward Ms. Wilson. However, since Ms. Jarnagin had been rude in the past to other employees who were not Black, they concluded that her behavior was not racially motivated, the people said.

Mr. Evangelisti said the officials’ conclusions had been “based on information provided by Ms. Wilson at the time.”

Ms. Jarnagin was given two “coaching” sessions, including one by her boss, the people said. She was never formally disciplined, but was advised to treat Ms. Wilson more gently, they said. Ms. Jarnagin left JPMorgan in November 2017.

JPMorgan officials also did a broader “climate study” of the area where Ms. Wilson worked, the people familiar with the matter said. The study concluded that there did not appear to be a problem with racism.

However, two Black employees interviewed for the study, who did not want to be identified for fear of retaliation, told The Times that race was a constant undertone in their interactions with non-Black employees. One said Black secretaries felt it was harder for them to get promotions, and they believed they were underpaid. But the Black employees said they downplayed the racism they witnessed to bank officials, partly because it wasn’t directed at them.

JPMorgan officials have recently acknowledged that some employees still do not feel safe speaking up. In March, the bank announced that it had reviewed its anti-discrimination practices and identified several areas for improvement.

Things didn’t improve for Ms. Wilson after her complaint.

Mr. Evangelisti said JPMorgan gave her nearly a year to search for a new job inside the bank as well as a raise and bonus during that time. Ms. Wilson said the only job the bank offered her was a role working for a man who had become enraged at her over a disagreement with her boss when she worked in the audit department.

Mr. Evangelisti said the role would have come with the same title, grade and compensation as her prior job, “but Ms. Wilson declined the role and refused to provide any context about an ‘unpleasant exchange’ she claims to have had.”

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The Trump campaign celebrated a growth record that Democrats downplayed.

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The White House celebrated economic growth numbers for the third quarter released on Thursday, even as Joseph R. Biden Jr.’s presidential campaign sought to throw cold water on the report — the last major data release leading up to the Nov. 3 election — and warned that the economic recovery was losing steam.

The economy grew at a record pace last quarter, but the upswing was a partial bounce-back after an enormous decline and left the economy smaller than it was before the pandemic. The White House took no notice of those glum caveats.

“This record economic growth is absolute validation of President Trump’s policies, which create jobs and opportunities for Americans in every corner of the country,” Mr. Trump’s re-election campaign said in a statement, highlighting a rebound of 33.1 percent at an annualized rate. Mr. Trump heralded the data on Twitter, posting that he was “so glad” that the number had come out before Election Day.

The annualized rate that the White House emphasized extrapolates growth numbers as if the current pace held up for a year, and risks overstating big swings. Because the economy’s growth has been so volatile amid the pandemic, economists have urged focusing on quarterly numbers.

Those showed a 7.4 percent gain in the third quarter. That rebound, by far the biggest since reliable statistics began after World War II, still leaves the economy short of its pre-pandemic levels. The pace of recovery has also slowed, and now coronavirus cases are rising again across much of the United States, raising the prospect of further pullback.

“The recovery is stalling out, thanks to Trump’s refusal to have a serious plan to deal with Covid or to pass a new economic relief plan for workers, small businesses and communities,” Mr. Biden’s campaign said in a release ahead of Thursday’s report. The rebound was widely expected, and the campaign characterized it as “a partial return from a catastrophic hit.”

Economists have warned that the recovery could face serious roadblocks ahead. Temporary measures meant to shore up households and businesses — including unemployment insurance supplements and forgivable loans — have run dry. Swaths of the service sector remain shut down as the virus continues to spread, and job losses that were temporary are increasingly turning permanent.

“With coronavirus infections hitting a record high in recent days and any additional fiscal stimulus unlikely to arrive until, at the earliest, the start of next year, further progress will be much slower,” Paul Ashworth, chief United States economist at Capital Economics, wrote in a note following the report.

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Black and Hispanic workers, especially women, lag in the U.S. economic recovery.

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The surge in economic output in the third quarter set a record, but the recovery isn’t reaching everyone.

Economists have long warned that aggregate statistics like gross domestic product can obscure important differences beneath the surface. In the aftermath of the last recession, for example, G.D.P. returned to its previous level in early 2011, even as poverty rates remained high and the unemployment rate for Black Americans was above 15 percent.

Aggregate statistics could be even more misleading during the current crisis. The job losses in the initial months of the pandemic disproportionately struck low-wage service workers, many of them Black and Hispanic women. Service-sector jobs have been slow to return, while school closings are keeping many parents, especially mothers, from returning to work. Nearly half a million Hispanic women have left the labor force over the last three months.

“If we’re thinking that the economy is recovering completely and uniformly, that is simply not the case,” said Michelle Holder, an economist at John Jay College in New York. “This rebound is unevenly distributed along racial and gender lines.”

The G.D.P. report released Thursday doesn’t break down the data by race, sex or income. But other sources make the disparities clear. A pair of studies by researchers at the Urban Institute released this week found that Black and Hispanic adults were more likely to have lost jobs or income since March, and were twice as likely as white adults to experience food insecurity in September.

The financial impact of the pandemic hit many of the families that were least able to afford it, even as white-collar workers were largely spared, said Michael Karpman, an Urban Institute researcher and one of the studies’ authors.

“A lot of people who were already in a precarious position before the pandemic are now in worse shape, whereas people who were better off have generally been faring better financially,” he said.

Federal relief programs, such as expanded unemployment benefits, helped offset the damage for many families in the first months of the pandemic. But those programs have mostly ended, and talks to revive them have stalled in Washington. With virus cases surging in much of the country, Mr. Karpman warned, the economic toll could increase.

“There could be a lot more hardship coming up this winter if there’s not more relief from Congress, with the impact falling disproportionately on Black and Hispanic workers and their families,” he said.

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Ant Challenged Beijing and Prospered. Now It Toes the Line.

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As Jack Ma of Alibaba helped turn China into the world’s biggest e-commerce market over the past two decades, he was also vowing to pull off a more audacious transformation.

“If the banks don’t change, we’ll change the banks,” he said in 2008, decrying how hard it was for small businesses in China to borrow from government-run lenders.

“The financial industry needs disrupters,” he told People’s Daily, the official Communist Party newspaper, a few years later. His goal, he said, was to make banks and other state-owned enterprises “feel unwell.”

The scope of Mr. Ma’s success is becoming clearer. The vehicle for his financial-technology ambitions, an Alibaba spinoff called Ant Group, is preparing for the largest initial public offering on record. Ant is set to raise $34 billion by selling its shares to the public in Hong Kong and Shanghai, according to stock exchange documents released on Monday. After the listing, Ant would be worth around $310 billion, much more than many global banks.

The company is going public not as a scrappy upstart, but as a leviathan deeply dependent on the good will of the government Mr. Ma once relished prodding.

More than 730 million people use Ant’s Alipay app every month to pay for lunch, invest their savings and shop on credit. Yet Alipay’s size and importance have made it an inevitable target for China’s regulators, which have already brought its business to heel in certain areas.

These days, Ant talks mostly about creating partnerships with big banks, not disrupting or supplanting them. Several government-owned funds and institutions are Ant shareholders and stand to profit handsomely from the public offering.

The question now is how much higher Ant can fly without provoking the Chinese authorities into clipping its wings further.

Excitable investors see Ant as a buzzy internet innovator. The risk is that it becomes more like a heavily regulated “financial digital utility,” said Fraser Howie, the co-author of “Red Capitalism: The Fragile Financial Foundation of China’s Extraordinary Rise.”

“Utility stocks, as far as I remember, were not the ones to be seen as the most exciting,” Mr. Howie said.

Ant declined to comment, citing the quiet period demanded by regulators before its share sale.

The company has played give-and-take with Beijing for years. As smartphone payments became ubiquitous in China, Ant found itself managing huge piles of money in Alipay users’ virtual wallets. The central bank made it park those funds in special accounts where they would earn minimal interest.

After people piled into an easy-to-use investment fund inside Alipay, the government forced the fund to shed risk and lower returns. Regulators curbed a plan to use Alipay data as the basis for a credit-scoring system akin to Americans’ FICO scores.

China’s Supreme Court this summer capped interest rates for consumer loans, though it was unclear how the ceiling would apply to Ant. The central bank is preparing a new virtual currency that could compete against Alipay and another digital wallet, the messaging app WeChat, as an everyday payment tool.

Ant has learned ways of keeping the authorities on its side. Mr. Ma once boasted at the World Economic Forum in Davos, Switzerland, about never taking money from the Chinese government. Today, funds associated with China’s social security system, its sovereign wealth fund, a state-owned life insurance company and the national postal carrier hold stakes in Ant. The I.P.O. is likely to increase the value of their holdings considerably.

“That’s how the state gets its payoff,” Mr. Howie said. With Ant, he said, “the line between state-owned enterprise and private enterprise is highly, highly blurred.”

China, in less than two generations, went from having a state-planned financial system to being at the global vanguard of internet finance, with trillions of dollars in transactions being made on mobile devices each year. Alipay had a lot to do with it.

Alibaba created the service in the early 2000s to hold payments for online purchases in escrow. Its broader usefulness quickly became clear in a country that mostly missed out on the credit card era. Features were added and users piled in. It became impossible for regulators and banks not to see the app as a threat.

ImageAnt Group’s headquarters in Hangzhou, China.
Credit…Alex Plavevski/EPA, via Shutterstock

A big test came when Ant began making an offer to Alipay users: Park your money in a section of the app called Yu’ebao, which means “leftover treasure,” and we will pay you more than the low rates fixed by the government at banks.

People could invest as much or as little as they wanted, making them feel like they were putting their pocket change to use. Yu’ebao was a hit, becoming one of the world’s largest money market funds.

The banks were terrified. One commentator for a state broadcaster called the fund a “vampire” and a “parasite.”

Still, “all the main regulators remained unanimous in saying that this was a positive thing for the Chinese financial system,” said Martin Chorzempa, a research fellow at the Peterson Institute for International Economics in Washington.

“If you can’t actually reform the banks,” Mr. Chorzempa said, “you can inject more competition.”

But then came worries about shadowy, unregulated corners of finance and the dangers they posed to the wider economy. Today, Chinese regulators are tightening supervision of financial holding companies, Ant included. Beijing has kept close watch on the financial instruments that small lenders create out of their consumer loans and sell to investors. Such securities help Ant fund some of its lending. But they also amplify the blowup if too many of those loans aren’t repaid.

“Those kinds of derivative products are something the government is really concerned about,” said Tian X. Hou, founder of the research firm TH Data Capital. Given Ant’s size, she said, “the government should be concerned.”

The broader worry for China is about growing levels of household debt. Beijing wants to cultivate a consumer economy, but excessive borrowing could eventually weigh on people’s spending power. The names of two of Alipay’s popular credit functions, Huabei and Jiebei, are jaunty invitations to spend and borrow.

Huang Ling, 22, started using Huabei when she was in high school. At the time, she didn’t qualify for a credit card. With Huabei’s help, she bought a drone, a scooter, a laptop and more.

The credit line made her feel rich. It also made her realize that if she actually wanted to be rich, she had to get busy.

“Living beyond my means forced me to work harder,” Ms. Huang said.

First, she opened a clothing shop in her hometown, Nanchang, in southeastern China. Then she started an advertising company in the inland metropolis of Chongqing. When the business needed cash, she borrowed from Jiebei.

Online shopping became a way to soothe daily anxieties, and Ms. Huang sometimes racked up thousands of dollars in Huabei bills, which only made her even more anxious. When the pandemic slammed her business, she started falling behind on her payments. That cast her into a deep depression.

Finally, early this month, with her parents’ help, she paid off her debts and closed her Huabei and Jiebei accounts. She felt “elated,” she said.

China’s recent troubles with freewheeling online loan platforms have put the government under pressure to protect ordinary borrowers.

Ant is helped by the fact that its business lines up with many of the Chinese leadership’s priorities: encouraging entrepreneurship and financial inclusion, and expanding the middle class. This year, the company helped the eastern city of Hangzhou, where it is based, set up an early version of the government’s app-based system for dictating coronavirus quarantines.

Such coziness is bound to raise hackles overseas. In Washington, Chinese tech companies that are seen as close to the government are radioactive.

In January 2017, Eric Jing, then Ant’s chief executive, said the company aimed to be serving two billion users worldwide within a decade. Shortly after, Ant announced that it was acquiring the money transfer company MoneyGram to increase its U.S. footprint. By the following January, the deal was dead, thwarted by data security concerns.

More recently, top officials in the Trump administration have discussed whether to place Ant Group on the so-called entity list, which prohibits foreign companies from purchasing American products. Officials from the State Department have suggested that an interagency committee, which also includes officials from the departments of defense, commerce and energy, review Ant for the potential entity listing, according to three people familiar with the matter.

Ant does not talk much anymore about expanding in the United States.

Ana Swanson contributed reporting.

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