The Board vs. the Babe

Nita Heckendorn seemed to be a rare exception: the woman who would never run into the "glass ceiling" that blocks female executives from reaching the top levels of American business. From the day she joined the global operator of hospitals known as National Medical Enterprises in 1980, she moved quickly through the male-dominated ranks. By the age of 47, she had done so well in her role as strategic planner that she was promoted to executive vice president and a director at the corporation, which has more than 48,000 employees and sales of $3.8 billion. Last year Heckendorn set her sights on the last big step: she aggressively sought the job of chief executive, a post that fewer than half a dozen women have reached at America's 500 largest corporations.

It would never happen. Heckendorn, now 50, says she finally ran into a high- level gauntlet of sexual harassment and discrimination. In a lawsuit filed last week, she accuses one male director of repeatedly calling her "babe" and another of inviting her to sit on his lap at a board meeting. Heckendorn, who claims she was passed over for the top job solely because she is a woman, is demanding $15 million in damages. "This is a way to seek a remedy and, hopefully, vindication," she says. National Medical, which is based in Santa Monica, California, denied the charges and vowed to fight the suit "vigorously."

Regardless of how it is settled, Heckendorn's complaint could encourage similar challenges by high-ranking women who believe they have been wrongfully passed over. While women have brought record numbers of sexual harassment and bias suits in the past year, the pinnacles of corporate power have remained virtually all-male aeries untroubled by female challenges. "It's very unusual to have a suit at this level, although I've been approached by a number of highly placed executive women who have been harassed by a CEO or someone of equally high rank," says Ellen Bravo, executive director of 9to5, National Association of Working Women. "Typically those women take a settlement and get out because it's just too messy and they fear that in speaking out their career will be destroyed."

Heckendorn, a native of Valencia, Spain, lost the CEO race last spring during a management shakeup at National Medical, a troubled behemoth that faces $750 million in lawsuits for allegedly overbilling insurance companies. While Heckendorn claims to have been the handpicked successor of Richard Eamer, a co-founder of the firm who stepped aside in the shuffle, the top job went instead to Jeffrey Barbakow, a National Medical director and former executive of the securities firm Donaldson, Lufkin & Jenrette. According to Heckendorn's suit, influential board members rebelled at the thought of a female CEO and called the idea crazy. After taking over, Barbakow ousted Heckendorn from the board as part of a move to reduce the number of inside directors.