Former WSJ editor may pursue racial bias case

NEW YORK (Reuters) - A former Wall Street Journal editor may pursue a racial discrimination case against her one-time employer, after alleging that she was fired because she is black, a federal judge has ruled.

Judge Deborah Batts of the federal district court in Manhattan said a juror could conclude that the race of Carolyn Phillips, the paper's first black assistant managing editor, was "at least one motivating factor" in decisions leading to her November 2002 dismissal after two decades at the paper.

"Plaintiff has produced sufficient circumstantial evidence to create a genuine issue of material fact as to whether intentional discrimination influenced the adverse employment decisions at issue," possibly violating federal and state law, Batts said in her 45-page order dated Monday.

Batts' ruling sets the stage for a possible trial. The judge rejected Phillips' separate claim alleging discrimination on the basis of disability. Phillips originally sought compensatory damages and $5 million of punitive damages.

The Journal at the time was owned by Dow Jones & Co and is now owned by Rupert Murdoch's News Corp.

"Dow Jones does not discriminate, period," Dow Jones spokeswoman Ashley Huston said. "We are gratified the court dismissed the disability claim, and we expect to prevail on the other claim at trial."

Phillips' lawyer did not immediately return a request for comment.

According to Monday's order, Phillips had regularly received positive performance reviews as well as five merit pay increases during her tenure, but would come to feel marginalized after becoming the Journal's head of recruitment.

The judge said a juror could find that race may have been one factor behind possible dissatisfaction with Phillips' job performance expressed by the Journal's managing editor and a deputy managing editor, Paul Steiger and Daniel Hertzberg.

She also said a juror could find that those editors preferred two white candidates for various responsibilities over Phillips because of her race and that Steiger failed to assign Phillips new duties because he preferred Caucasian staff.

According to the order, Phillips also alleged that Steiger made comments to her that were or could be racial in nature.

In one such alleged instance, Phillips said he told her he felt like a "black man in Beverly Hills" after being covered with soot and ash following the September 11 attacks that ruined the Journal's New York office. Steiger contested that he ever made the comment, according to the order.

Steiger, now chief executive of the nonprofit ProPublica, said in an interview on Tuesday: "Carolyn Phillips was not discriminated against on account of her race while at the Journal. I expect a jury, when it hears all the testimony, will agree."

Hertzberg recently joined Bloomberg News as senior editor-at-large. Bloomberg spokeswoman Judith Czelusniak declined to comment.

The case is Phillips v. Dow Jones & Co, U.S. District Court, Southern District of New York (Manhattan), No. 04-5178.

(Reporting by Jonathan Stempel; Editing by Lisa Von Ahn)