San Francisco- When Susan Peacher, the former Miss Celeste, hung up her latex evening gown and wooden paddle for a job with the federal government, the former dominatrix thought she was done with abuse.

She went to work for the Treasury Department in San Francisco, but when she arrived at her new job, she found that one of the office managers was a former client.

This man wouldn’t leave her alone, she said in a sexual harassment and retaliation lawsuit, charging that he sexually harassed her, attempting to kiss her in the elevator, telling her she had “luscious lips,” and repeatedly asking for “sessions.”

When she objected to the salacious advances, Peacher says, the manager manipulatively became her direct supervisor and downgraded her performance evaluation. When she complained to higher-ups, coming out of the closet about her previous line of work, she says she was retaliated against and given little to do.

Rather than sit idly at her desk, Peacher spent her time studying workplace harassment and labor law. She also accumulated an arsenal of damning evidence: phone logs, e-mails, documentation of encounters with her alleged harasser.

Last month, Peacher, 45, reached a settlement with the government, which did not admit liability or fault. She will receive $35,000 in compensatory damages, $25,000 in attorney fees, a job transfer, approval to work at her South Bay home one day a week, and the restoration of almost 800 hours of assorted leave.

“I don’t think they expected me to fight as hard as I did,” Peacher says.

In her unorthodox career path, Peacher went from Mistress Celeste to Norma Rae, from sex work in a San Francisco dungeon to white-collar respectability as a government program analyst. In federal service, she became a workers’ rights crusader.

Peacher works for Financial Management Service, a division of the Treasury Department. One of four such centers nationally, the Bay Area branch issues about 10 million payments monthly — including tax refunds and Social Security payments — worth $13.5 billion.

Philip Belisle, director of the 120-employee operation, says sexual harassment is not tolerated. Managers receive mandatory Equal Employment Opportunity training, he says, and “we also provide frequent verbal reminders . .. that we must treat each other with respect and dignity.”

Peacher says it was galling to have to explain to management about her dominatrix work when bringing her complaint.

“I was very afraid I would lose credibility,” she says. “The Bay Area is a little more accepting than other places, but I’m a private person. While I have no shame over what I did to make a living, I didn’t want to be in a position where I was judged by the choices I made.”

Born in Washington, D.C., Peacher worked for years there as an office manager in the private sector. In 1994, she moved to California, a single mother with a young daughter.

For several years, she struggled financially, then found a job at the Department of Veterans Affairs, driving from her home in San Rafael to Palo Alto. Wearied by the commute, she began working in customer service in 1999 for a private company that soon folded. That’s when, after attending a “pro domme” seminar, she considered the lucrative pay of the adult industry.

“I was initially a little leery,” she says. “I’m an analyst at heart. I wanted to know what I was getting into. I didn’t want to get arrested. I have no record.”

Initially she worked at Castle Bar, a now-defunct San Francisco dungeon. Later she branched out on her own, renting a room and screening her own clients.

“It was not prostitution. It was fantasy role-play,” she says.

She also worked part-time as a “geek” in a high-tech company.

“Life was really good,” she says. “I had two jobs going.”

But by 2001, as the economy soured, the high-tech firm went under, Peacher’s client list dried up, and she searched for new work.

“I thought the safest place would be the federal government,” she says.

She started at Financial Management Services on July 2, 2001.

Her first day on the job, she was introduced to Richard Soulam, a branch manager. According to court documents, Soulam was a former client of Peacher.

Days later, Soulam grabbed and tried to kiss Peacher in the elevator, Peacher’s lawsuit said.

A week later, Soulam e-mailed her asking for a business session, the suit says. She told him she no longer did “pro domme” work and asked him to stop contacting her.

For months, Soulam “engaged in unwelcome, offensive and lewd sexual conduct,” court records say. “… Soulam stared at plaintiff sexually, made sexual comments to her, commented on her appearance, attempted to kiss her and offered her rides home.”

Soulam, 62, who has retired, did not respond to a Chronicle request for an interview.

Early on, Peacher notified her supervisor, Dorothy Ramos, about the alleged harassment.

“Other branch managers began to notice how Rich looked at Susan in meetings,” Ramos said in court documents.

Soulam told Ramos that he was planning to promote Peacher and transfer her under his wing, which he did in December 2002.

Ramos said she approved a flextime schedule that would have allowed Peacher to work at home one day a week.

“My hope was that this would help to alleviate the stress,” she wrote. But Belisle and Soulam rejected the schedule.

Ramos said she and another supervisor tried to keep Soulam away from Peacher, and “that sometimes meant that we had to deal with Phil being angry with us … which I feel hurt our own careers …”

Several times, Ramos wrote, Peacher went to her in tears.

“It was clear that she was totally stressed out by the situation with Rich and the ways he pursued her and how relentless he was in doing this,” Ramos said. “He just seemed to keep coming up with new ways of getting to Susan.”

In early 2003, Soulam lowered her rating on her job appraisal. Then, around March 2003, Soulam told red-haired Peacher to “dye her hair black and be less assertive,” says Peacher’s complaint.

In April, she wrote Belisle, telling him that Soulam had harassed her sexually “since my first days of work for the Department of Treasury. … His pattern is ongoing, unaltered, and now has become distinctly retributive since my explicit insistence that he stop.”

She asked Belisle to reassign her and to ensure that Soulam and she not work together. “I also insist that I not be singled out for additional harassment or retaliation of any kind,” she wrote.

She was given a different cubicle and manager, but her computer with specialized software was taken away and for weeks she had no job assignments, according to court papers.

She filed suit in June 2004, after initially filing a complaint with the Equal Employment Opportunity Commission.

Belisle says misconduct is not tolerated.

“When these things arise, as infrequent as they may be, we stay on them until the issue is resolved,” he says.

Peacher, now a leader with the local chapter of the National Treasury Employees Union, says she feels vindicated.

“If someone doesn’t stand up, things won’t ever change,” she says. “For me, it was just a step in the process of trying to go to work.”