A federal judge said the agency and its director, Hector Barreto, should have known about the mistreatment of Mary Conway-Jepson in the agency's Montana office, and failed to do anything.
Jepson said she was asked to help in a scheme to rid the SBA office of what former district director Jo Alice Mospan considered too many male supervisors.
When she refused, Mospan began a "lengthy, continuous and pervasive pattern of retaliatory treatment," U.S. District Judge Charles C. Lovell wrote in an order issued Tuesday. He said Jepson had no choice but to resign in 1997.
Lovell ordered the SBA to pay Jepson $433,000 in back wages, $50,000 for her emotional pain, suffering, inconvenience and lost enjoyment of life, and an undetermined amount for attorney fees.
He also said the agency must either offer her a $67,000-a-year job or pay her that much in each of the next three years until Jepson reaches her retirement age of 62.
Mike Stamler, an SBA spokesman in Washington, D.C., said Wednesday the agency had no comment because its lawyers had yet to see the ruling, and had not decided whether to appeal.
Barreto was named in the suit because he is the agency's current director. He did not head the agency at the time of Jepson's employment.
Jepson, who lives near Sacramento, Calif., applauded Lovell's order.
"It sends a message to other federal agencies that when this kind of thing is going on they really have to step in and stop it," she said Wednesday.
Mospan, who no longer works for the SBA, did not immediately reply to a phone message left at her Woodland, Ala., home.
By Bob Anez