MADISON (AP) - The federal government may withhold $350 million in funds from the University of Wisconsin System unless settlements are reached with women professors who left UW-Milwaukee because of sexual harassment or bias.

Officials from the UW System, UW-Milwaukee and the U.S. Labor Department are developing a list of affected women and the awards they would be eligible for, UW System President Katharine C. Lyall said Monday.

The women left UW-Milwaukee's Schools of Business Administration and Fine Arts and the department of English and comparative literature since Feb. 13, 1989. The school says 13 women left during that time.

One of the women reached Monday said she would seek a settlement similar to one announced last week with Ceil Pillsbury, a business professor who was denied tenure at UW-Milwaukee. Pillsbury's settlement totaled $126,000 and granted her another shot at tenure.

Though the problem originated at UW-Milwaukee, federal funds for the entire system are at stake, Lyall said. Failure to reach a settlement acceptable to the Labor Department could result in the loss of $350 million in federal money, she said.

"It's my understanding that the Department of Labor's ultimate penalty is that they can hold up federal grants and contracts," Lyall said. "But that is only if the very worst occurred - if we didn't reach a conciliation agreement. We're determined that that won't happen."

Lyall said there was no fixed deadline for a settlement, but she added that an agreement could be reached in the "next few weeks."

A Labor Department official declined to comment Monday on the negotiations, saying the case was still open.

Last October, the Labor Depart prescribed several actions that UW-Milwaukee officials should undertake to deal with sexual discrimination on campus.

The violations labor officials had discovered at UW-Milwaukee included:

Discrimination against female faculty: A "pattern and practice of discrimination" against women has existed at UW-Milwaukee, labor officials reported.

Sexual harassment: "UWM has discriminated against women by allowing such harassment by creating or tolerating a hostile work environment," the report said.

UW-Milwaukee was told to contact the women affected and offer them jobs, benefits, back pay, promotions and tenure.

But UW-Milwaukee officials said at the time they already had taken steps to deal with the problem and that faculty government rules prevented them from doing more.

The Milwaukee Journal reported Tuesday that the negotiations underway began while the UW System settled a long-running dispute with Pillsbury. She had been denied tenure at UW-Milwaukee's School of Business Administration in 1989. She then filed a federal lawsuit, contending she was denied tenure because of sexual bias.

"I indicated to the Labor Department that I wanted my job back and back pay," said a woman who also was denied tenure since 1989. She asked not to be identified. "I want a settlement similar to Ceil Pillsbury."

The woman said she had talked to Labor Department officials on Monday and had been told negotiations with her would begin this week.

Lyall declined to speculate on the cost of the settlements for the women, saying each agreement would be unique.

"I wouldn't assume that it would be (Pillsbury's) settlement over and over again," Lyall said. "Each one will be different."

Negotiations with the Labor Department coincide with another federal review of the UW System's tenure process, officials said.

Last year, the U.S. Justice Department launched a broad-based investigation, looking into sexual discrimination on UW campuses.

The 26-campus system, in 1991-'92, employed 2,931 professors, 1,913 associate professors and 2,092 assistant professors. Women accounted for 12 percent of the professors, 24.6 percent of the associates and 38.4 percent of the assistants.

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