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Mayor Bloomberg's Delicate Condition The company that bears this billionaire politician's name is facing a suit charging it with discrimination against pregnant workers.

By Sheelah Kolhatkar

One day in October 2004, Tanys Lancaster says, she met with her manager at Bloomberg L.P., the media and financial-data empire founded by the mayor of New York City, Michael Bloomberg. She'd been demoted, her boss informed her, and her bonus was being slashed by a third. "Accept it," she recalls her manager telling her.

It was not the sort of directive that Lancaster, now 39, who'd been with the company for 10 years, was likely to accept without protest.

"I was livid," she says today. She was also feeling sick and miserable. Lancaster had undergone months of in vitro fertilization treatments and was pregnant with twins-news she'd shared with her supervisor as soon as she found out, the month before.

At the time of her demotion, Lancaster was one of Bloomberg's highest-ranking female executives, managing a team that sold the company's financial software worldwide. Her compensation was generous-a $130,000 base salary and a $285,000 deferred bonus the previous year. "It was a phenomenal place to learn and develop," says Lancaster, a blond, green-eyed Englishwoman. She sits tensely in her lawyer's downtown Manhattan office as she speaks for the first time to a reporter. "I worked with motivated, professional people. We worked very hard, and we had high-profile customers. It was exciting and challenging."

Following her demotion, though, and especially after she returned from maternity leave, Lancaster says, her status within the company went downhill. Time spent caring for her newborn twin boys cut into the marathon hours she used to put in at the office. She found herself without an official department and dropped another rung on the ladder until finally she complained to human resources, claiming that she hadn't assumed an equivalent position in the company upon returning from maternity leave, as is required by federal law.

Nothing changed. Almost a year to the day after she was demoted, Lancaster resigned, convinced that she'd been pushed out because she had become a mother. She hired a lawyer, who filed a complaint with the federal Equal Employment Opportunity Commission, which enforces antidiscrimination laws in the workplace.

The E.E.O.C., it turned out, had already fielded a similar charge against Bloomberg L.P. on behalf of another employee, Jill Patricot, and would soon begin looking into a third. In September 2007, the agency filed a class-action lawsuit against the company on behalf of Lancaster, Patricot, and Janet Loures, all of whom worked on the business side, plus a group of women who worked at the company between 2002 and the present. The plaintiffs had all, in the view of the E.E.O.C., suffered discrimination. They now total 72, out of about 500 women who took maternity leave during that time, a high percentage, according to the agency. (Many are still employed at the company, including Patricot and Loures; Lancaster is at Thomson Reuters.) The named plaintiffs say their pay was cut and their job responsibilities reduced once they became pregnant and also after they returned from maternity leave. In a 45-page response, Bloomberg L.P. denied the allegations, as well as Lancaster's version of the events that led to her resignation. Company spokeswoman Judith Czelusniak said, "We intend to litigate this case in the court, not the press, and we are confident that once all the facts come out they will demonstrate that the claims have no merit."

The first of dozens of depositions in the E.E.O.C. case was taken in October, and the agency's lawyers have notified Mayor Bloomberg that they intend to take his deposition as well. The class-action lawsuit, coinciding with Bloomberg's campaign for a third term as New York's mayor, might be expected to complicate his bid.

So far, however, it has not. His company's legal problems are a subject that Bloomberg, 66, is notoriously sensitive about, and he seldom discusses them, although he owns almost 90 percent of the company. (He declined to comment for this article.) Since taking office in 2002, he has officially recused himself from most of his firm's day-to-day affairs. But periodically a question comes up about his precise level of involvement, as it did when the E.E.O.C. lawsuit was first filed. Bloomberg initially denied knowing anything about the suit; then, a week later, he revealed that he'd talked about it with his company's management. "I am the majority owner, and I'm absolutely entitled to talk to the senior people and am entitled to know what's going on," he said.

In May, the New York Times reported that the mayor lost his temper when asked about the lawsuit during a news conference on the city's finances. "What does this have to do with the budget?' he snapped, although he had already expressed his thoughts on other subjects. "You'll have to ask the company. And next time, don't bother to ask us a question. Stick to the topic. Everybody else plays by the rules; you'll just have to as well.'

Call it the two faces of Michael Bloomberg. As mayor, he quickly gained a reputation for being a liberal-minded chief executive, admired by progressives and conservatives alike. Says the political consultant Hank Sheinkopf, "Here's a billionaire who, some might say, does not have the common touch. But he has managed to win over the electorate in a town that eats its politicians for breakfast."

During his two terms, Bloomberg has devoted energy and resources to certain causes that are important to women. He is strongly pro-choice, for instance, and has backed programs to combat domes�tic violence. He has also appointed more women to the upper echelons of city government-among them his top aide and closest confidante, former Bloomberg executive Patricia Harris-than any mayor in recent memory.

Ask almost any woman who works with him in his present incarnation for her opinion, and she will issue a glowing report. "Women's issues are very, very important to him," says Christine Quinn, the speaker of the New York City Council. "Maybe as a father of two daughters, who's obviously a terrific son who very much loves his mom, he's driven by the important role women have played in his life."

The question, then, is what to make of that Michael Bloomberg in light of the statements of dozens of women who say they've been mistreated at his company-the other Bloomberg administration, as it were. The firm bears his stamp in nearly every conceivable way. Its corporate culture reflects the personality and predilections of the founder. The executives who run it in his absence were all chosen by him. In fact, the current president, Dan Doctoroff, was previously a deputy mayor in Bloomberg's City Hall.

And yet, in the public mind, there seems to be a disconnect between the popular politician and the founder and guiding light of a corporation that has a reputation as a difficult place for pregnant women and new mothers to work.

In 1981, at the age of 39, Michael Bloomberg was himself jostled out of a job-squeezed out of a partnership at the Salomon Brothers brokerage house. Salomon was famous for being one of the most testosterone-driven firms on Wall Street at a time when the industry was a true rogues gallery. Salomon was also Bloomberg's first and only professional home from the time he received his M.B.A. from Harvard at 24.

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With the $10 million he received in severance from Salomon, Bloomberg started his company. The twin pillars of the Bloomberg corporate culture come straight from its founder: (1) long hours and total devotion to the job, with no room for distractions, and (2) the raunchy, swaggering, locker-room vibe that held sway at Salomon and inspired the "big swinging dick" archetype. While those attributes contributed to Bloomberg L.P.'s success, they also brought troubles in the form of lawsuits filed by disgruntled female employees and attendant negative publicity.

Things have changed since the days when Bloomberg ran the show with three colleagues in a one-room office. His company now employs about 10,000 people and was valued in August at around $23 billion, a figure based on the price the company then paid to buy back a 20 percent stake in itself from Merrill Lynch. It boasts a highly regarded news operation with outlets in print, television, and radio, but 95 percent of revenue comes from the business side, which designs, sells, and services the famous Bloomberg terminal. Thousands of bankers, traders, and investment managers all over the world use the terminal to analyze market data, stream news, and communicate electronically. For years, the funny little box with green and yellow keys, which is leased for about $1,500 a month, has been a critical tool for anyone doing business on Wall Street.

Michael Bloomberg's famous bluntness and salty-sometimes downright crude-sense of humor typified the firm, especially in its early days. "He was always talking about my ass or my chest: 'Oh, are they real?'?" says a woman who worked for the company for 11 years. (She declined to be identified for this article.) "He was a goofy guy, always joking."

Off-color banter was so much a part of his persona that one former company executive, Elisabeth DeMarse, put together a 32-page booklet of Mike witticisms as a gag gift for his birthday, according to New York magazine. The first quote read, "Make the customer think he's getting laid when he's getting fucked."

"This is Bloomberg culture," DeMarse had said weeks before the 2001 mayoral election. "You have to understand, Mike is very uncensored. When Mike says outrageous things, it's sort of a test. It's a loyalty test. It's a bonding thing when everyone laughs. You stop thinking that it might be inappropriate."

While some accepted and even enjoyed the corporate patois, it caused problems for Bloomberg more than once. In 1997, a high-profile lawsuit was filed against Bloomberg and his firm by Sekiko Sakai Garrison, a sales executive.

"Women sales personnel were encouraged by Bloomberg [and other executives] to wear sexually provocative clothing," Garrison's complaint says. It claims that Bloomberg regularly made comments about women employees, including "I'd fuck that in a second," "I'd like to do that," and "That's a great piece of ass." At one point in 1996, the complaint alleges, Bloomberg announced to a group of workers at a sales conference, "I would like nothing more in life than to have Sharon Stone sit on my face."

Bloomberg's company operated as a true cult of personality, and managers took their cues from the chief. As a result, Garrison claims, the office was replete with adolescent pranks and offensive behavior, including leaving windup sex toys on desks and giving squirting rubber breasts as a joke to a new mother at a company party. Garrison claimed she was manhandled by a male colleague, teased about her "fuck-me shoes," and subjected to expletive-laden screaming fits thrown by her bosses.

A female sales manager who worked alongside Garrison in a more junior role describes her as someone who projected the image of a strong woman who could take care of herself. "But at the same time," the former sales manager continues, "that's what sex harassment is all about-one thing goes over the line, and that's what happened."

Garrison seems to have reached a breaking point once she got married and became pregnant. In the autumn of 1992, she alleges, Bloomberg became very angry after learning that one of his salespeople was pregnant and said, "For Christ's sake! What the hell did you do a thing like that for?" According to the suit, in 1993, upon overhearing a saleswoman complaining about finding a nanny for her newborn, Bloomberg screamed, "It's a fucking baby! All it does is eat and shit! It doesn't know the difference between you and anyone else!"

In 1995, Bloomberg allegedly approached Garrison in the communal snack area and asked her about married life. Garrison relayed the news that she was pregnant. Bloomberg's now-famous response, according to the suit, was, "Kill it...kill it!" before muttering, "Great! No. 16!" in reference to the number of women of "maternal status" who were then working for him. Garrison lasted one more day at the company and never returned. In a response to Garrison's complaint, Bloomberg and the company denied the allegations. Then, in March 2001, on the eve of his mayoral campaign, Bloomberg issued a statement saying that he had taken a polygraph test that showed he was telling the truth when he denied Garrison's allegations. (Bloomberg did not disclose the questions he had answered.) The company reportedly settled the lawsuit with no admission of guilt.

Around the same time, another sexual-harassment lawsuit was filed against Bloomberg's company by a 28-year-old sales representative who echoed Garrison's descriptions of Bloomberg's office persona. According to the court file, the case was closed in February 2001. Before that point, though, Bloomberg was deposed, and excerpts from his deposition were published by Wayne Barrett in the Village Voice. Bloomberg accused women who brought charges against the company and asked for damages of "extortion," but he didn't deny making vulgar comments in the office.

The "kill it" line was deployed in a campaign commercial by Bloomberg's 2001 Democratic opponent, Mark Green. But the lawsuits never took hold as a political issue. He squeaked into City Hall on a tide of his own money and post-September 11 shock. As Green points out today, "When someone wins office, often it erases any allegations that preceded his candidacy, so the winner can start with a clean slate."

As a privately held company, Bloomberg L.P. isn't subjected to much outside scrutiny. But it is known to be a high-pressure world with a management theory based on social Darwinism. That approach is pure, unabashed Bloomberg. "We simply throw everyone interested into the deep end of the pool, as it were, and stand back," he wrote in his memoir in 1997. "It becomes obvious very quickly who the best swimmers are." At Salomon, he made a point of being the first to work in the morning and the last to leave at night. "I've never understood why everybody else doesn't do the same thing," he wrote.

While Bloomberg no longer runs the company, it remains the basis of his immense wealth. He created its corporate culture-the intense work hard, play hard ethic that values dedication to the firm above most other things and demands long hours in exchange for relatively generous salaries and benefits. People who work there call him Mike, and his spirit inhabits every exotic-fish tank and glass conference room in the sleek new corporate headquarters in midtown Manhattan.

Long days and lots of face time are held sacred: Employees on the business side are typically expected to be in the office from 8 a.m. to 6 p.m., depending on their job. Until this summer, when some policies were changed, the idea of working part-time was sacrilege. Former employees said that going to a doctor's appointment-or taking a child to one-required using a vacation day, because being out of the office for an hour or two was so frowned upon. "If you left at 5 after being there since 8, it was like, 'Oh, half a day?'?" says the 11-year veteran of the company. "Even though I had a two-year-old and a six-month-old at home, people would say, 'You're leaving?'?" (A company spokeswoman denies the existence of these rules regarding time out of the office.)

Employee hours are monitored through an I.D.-badge system that tracks people as they enter and leave the building, and computers indicate when they are idle. "Some people say, 'Wow, that is really Big Brother,' and that is probably part of the goal," says a former sales employee. "But part of it is what Bloomberg prides itself on-customer service." Indeed, when one calls a worker, customer support can usually say exactly where that person is. As another former staffer puts it, "Every moment of every day was badged." She says that she wore a pager even when she was in the bathroom.

The design of the company's offices takes the "open concept" idea to an extreme. Everyone from secretaries to the president sits at long white banks of desks, similar to those on investment-firm trading floors. "If being invisible from your colleagues is what you crave, we're not the right place for you," Bloomberg wrote in his book. One drawback, though, is that everyone is into everyone else's business-which includes some of the managerial temper tantrums that have become legend.

One person who's famous for yelling in the office is Matthew Winkler, editor in chief of Bloomberg News. One of his tirades, in which he screamed at a group of employees who were protesting the sudden firing of a colleague, was recorded and posted on the website Gawker. (Winkler declined to comment.) Former employees also reported dramatic run-ins with former C.E.O. Fenwick-now head of a company project called Bloomberg Ventures-who could erupt in desk-pounding, cursing rants. (Fenwick declined to comment.)

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Even so, many employees find Bloomberg to be an invigorating place to work. "There's a lot of buzz all the time. It's a really fun place to be," says a current manager. "There was a free-spirited ability to do or try anything," a former marketing manager says. "If you have a good idea, you can run with it."

There are other perks too, including mountains of snacks free for the taking. One former employee describes the newsroom as reminiscent of a "big, modern airport," with a spread of fresh fruit, iced tea, cappuccino, gourmet chips, cookies, and nuts where employees can graze.

Bloomberg's maternity leave is generous by U.S. standards. Employees get 12 weeks of paid leave, with the option of taking an additional four weeks unpaid. Benefits also include backup child care and a lactation room, and the company pays 100 percent of health- and dental-insurance premiums.

What really keeps people tied to the place, though, is the money. On the sales side, a key part of the compensation is traditionally paid out as Bloomberg certificates-deferred bonuses whose value is based on sales. This translates into healthy six-figure pay for many sales employees.

And even some of the female staffers who say they hated aspects of the way they were treated qualified their statements by saying how much they enjoyed the work. "It's an amazing company," says one marketing manager who worked there for seven years. "I loved my job. But the work-life balance wasn't going to be acceptable. At some point, you're just like, 'I want to spend some time with my kids. I just need some sort of ability to do that.'?"

A few women said they had managed to keep their careers on track and also have children while working at the company. "Women at Bloomberg have been promoted during maternity leave, upon returning from leave, and during their pregnancies," says Czelusniak, the company spokeswoman.

One of the most surprising aspects of the class-action lawsuit is that women are among the alleged perpetrators of discrimination and hostility toward pregnant women and working mothers. In their complaint, both Patricot and Loures describe encounters with the firm's global head of data, Beth Mazzeo, who is one of the highest-ranking women at the company and has three kids herself. Patricot alleges Mazzeo told her that her career had been "paused" after she had her first child. After Patricot asked for a change in schedule, she was demoted, and Mazzeo was verbally abusive, the complaint says. Loures also saw her responsibilities shrink under Mazzeo, according to the complaint. Czelusniak says Mazzeo was promoted during and after her maternity leave. Mazzeo declined to comment.

Speaking of pregnancy discrimination in general, and not of the Bloomberg lawsuit, Gary Phelan says, "Often the people who are the alleged wrongdoers are females, who often have children." Phelan co-chairs a practice group focused on family-responsibility discrimination at the law firm Outten & Golden. "I think part of it is they just remember how hard it was for them. Part of it also is resentment."

Michael Bloomberg has just achieved a political victory, persuading the New York City Council by a vote of 29 to 22 to pass legislation allowing him to run again. His company is also making some changes. In July, a former American Express executive, Melinda Wolfe, joined Bloomberg L.P. as head of professional development, responsible for diversity and inclusion. And perhaps of greatest interest to the company's hundreds of working parents, flextime has been introduced. Requests for work-from-home schedules can now be submitted to a committee for approval. A current Bloomberg manager says, "I think people are happy to hear that it's going to happen, but they're still not sure of the details of it." She adds, "Some might feel afraid to be the first to take advantage of it."

Today, some women in Michael Bloomberg's orbit can't imagine that an alternate persona could even exist. "I don't find it credible at all," says Ester Fuchs, a professor at Columbia who worked closely with him on public policy for five years. "He's probably one of the most fair-minded, even-handed people I've ever come across."

"If nothing else, it is clear he is adaptable," says Joyce Purnick, a former New York Times political columnist who is writing a biography of Bloomberg. "What worked well on Wall Street in his time there does not work in public life. So as mayor, he dropped the macho stuff.

Knocked Up in the Workplace

Under the Pregnancy Discrimination Act of 1978, companies can't discriminate against women because of any reason related to pregnancy or childbirth and must treat pregnant employees the same as any other "temporarily disabled" worker. And thanks to the federal Family and Medical Leave Act of 1993, most workers, male or female, can take up to 12 weeks of unpaid leave to care for a newborn, adopted, or foster child. (The law applies only to companies with 50 or more employees and to employees who have worked at the company for at least a year.)

Though many states have their own family-leave laws, only five-California, Hawaii, New Jersey, New York, and Rhode Island-offer any sort of paid leave to pregnant women and new mothers. In California, the first state to approve paid family leave, new mothers get up to 12 weeks of partially paid leave, and fathers get six. Pregnant women in New York get up to $170 a week for 26 weeks through the state's temporary-disability insurance program, and a new law gives workers in New Jersey up to $524 a week for six weeks to care for a child or sick relative.

Overall, the U.S. lags far behind almost every other country, particularly those in Europe. All new mothers in the European Union get at least 14 weeks of fully paid leave, and some countries are even more generous. France gives 16 weeks of paid leave, and U.K. allows a year of leave, with partial pay for 39 weeks. One of the best deals is in Sweden: Either parent can take a year of fully paid leave. -Jen Itzenson

Visit for the latest business news and opinion, executive profiles and careers.© 2007 Condé Nast Inc. All rights reserved.

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