Sex and the Small Branch: Does Edward Jones Model Invite Harassment?
A former administrator at Edward D. Jones has accused the firm of facilitating gender discrimination and sexual harassment as a result of the single-broker business model that dominates its network of more than 13,000 branches.
LaDonna Michot, who worked at two Jones branches in Louisiana for 12 years before being terminated in February, claimed in a lawsuit that a broker in one two-person office in Alexandria, La., verbally harassed her, while a second in Ball, La., physically assaulted her.
“Edward D. Jones knew or should have known that the business model used in remote areas was conducive to sexual harassment and other discriminatory treatment of women,” said the lawsuit.
The complaint, which seeks unspecified damages, adds a business-structure twist to a wave of sexual harassment cases in the U.S. that have spawned #MeToo movement from women across a broad range of industries.
“Edward Jones does not tolerate sexual harassment,” spokeswoman Regina DeLuca Imral said in an email. “We do not typically comment on pending litigation and will address the claims in the lawsuit in the appropriate forum.”
Jones is the largest U.S. brokerage firm, as measured by its sales force of over 16,000 brokers and its farflung branches, which are clustered in small communities. Most of its branches include an advisor and an assistant known as a branch office administrator.
“Almost without exception, the male was always the supervisor and the female was the subordinate,” the lawsuit says.
Michot initially filed the case in Rapides Parish court for the 9th Judicial District in April, but Jones had it moved to the U.S. District Court in the western district of Louisiana last week.
Edward Jones, whose parent Jones Financial is one of the few remaining partnerships in the securities industry, in May named Penny Pennington to be its first female managing partner, effective January 1. The St. Louis-based firm in September launched a recruiting campaign to increase women advisers. About 19% of its brokerage workforce was female, a figure slightly higher than industry averages, Jones said at the time.
Michot’s lawsuit said that former Jones broker Larry Hair groped her and made sexually offensive remarks “on a weekly and sometimes daily basis,” beginning in February 2016, just over a year after she arrived at the Ball, La. office. Jones in June 2017 fired Hair, who had worked at the firm for 17 years, after he “reportedly” admitted to the facts the administrator cited, the lawsuit says.
“Michot’s allegations against Mr. Hair are patently false and that will be proven through the course of litigation,” said Martha R. Crenshaw, Hair’s Alexandria-based lawyer. Hair has filed to dismiss the case, saying that civil claims of assault and battery were made too late.
Hair, who now works at Royal Alliance Associates, did not respond to a request for comment.
Michot’s lawsuit says her boss in Alexandria, Mark Pritchard, repeatedly made offensive remarks about clients and about a woman branch manager. Jones “failed to take prompt remedial action” after the administrator reported him to human resources officials, the complaint says.
Michot took a leave of absence due to Hair’s sexual harassment in May 2017 and was terminated in February 2018, according to the lawsuit.
It names Hair and Jones as defendants. Pritchard was not named because the statute of limitations had passed, according to Nelson Cameron, Michot’s Shreveport-based lawyer. Pritchard was out of town and unavailable for comment, according to a person answering the phone at his Jones branch in Alexandria.
The lawsuit, cofiled by Michot and her husband, does not seek class-action certification.
In May, a former Jones broker filed a putative class-action lawsuit in federal court in Illinois accusing the firm and its parent company of a widespread pattern of discrimination against African-American advisors.