News
On June 22, 2006, Mehri & Skalet, along with co-counsel Sprenger + Lang, PLLC and Moody & Warner, P.C., filed a lawsuit against Morgan Stanley on behalf of female financial advisors. The
Amended Complaint alleges that Morgan Stanley engaged in systemic gender discrimination against women financial advisors with respect to compensation, account assignments, “partnership” participation, promotions, training and mentoring and other terms and conditions of employment, all in violation of Title VII of the Civil Rights Act of 1964, as amended. The Complaint requests injunctive, declaratory and monetary relief, and seeks class action status.
On April 24, 2006, the three law firms announced a settlement with Morgan Stanley & Co. Incorporated f/k/a Morgan Stanley DW Inc., on behalf of approximately 2,700 women Financial Advisors and Registered Financial Advisor Trainees employed at Morgan Stanley at any time since August 5, 2003.
To view or download settlement documents, please scroll down to the bottom of this page. PDF versions of key documents are available by clicking on the links below.
This lawsuit focuses on gender inequity in the distribution of accounts and other business opportunities, as well as other terms and conditions of employment. The lawsuit derives from the Women on Wall Street Project announced by the National Council of Women’s Organizations and Mehri & Skalet three years ago this month in an effort to address historic gender inequity in the financial sector.
Eight women from five states served as named plaintiffs in an amended complaint filed with the Court on April 24, 2007. Co-Lead Counsel Steven Sprenger praised the women “for courageously stepping forward to bring about change in one of
America’s most powerful institutions.” He noted that plaintiffs’ counsel interviewed over 200 class members in 35 states and “the momentum behind the investigation became a powerful engine for meaningful change.”
Co-Lead Counsel
Cyrus Mehri declared that this is “one of the ten largest gender discrimination settlements in
U.S. history.” He added that “most importantly, we anticipate that this settlement will have an enduring impact on the way America’s financial institutions treat women financial advisors.”
The parties entered into a five year Settlement Agreement that is subject to Court approval. The settlement is valued at over $70 million, starting with a lump sum payment by Morgan Stanley of $46 million which will likely accrue interest of over a million dollars. Morgan Stanley will make an additional, yet to be determined payment to the Settlement Fund for the employer’s share of payroll taxes, The Settlement Fund will likely approach $50 million in total. A Special Master is expected to determine the allocation of monies among the women financial advisors and registered financial advisor trainees.
The parties estimate that, in addition to the Settlement Fund, the changes called for in the programmatic relief will increase the earnings of women financial advisors by at least $16 million over five years and the diversity efforts by the Company over five years will cost an additional $7.5 million.
The settlement was the result of two years of intensive negotiations, including over 15 days of in-person mediation sessions. Mehri hailed the settlement as a “milestone in the struggle for gender equity in the brokerage industry. Today begins a new day at Morgan Stanley and could chart a new course for an industry plagued by gender inequity.” He added that “Morgan Stanley deserves credit for working with us in a collaborative, proactive way over the two years of negotiations.”
Among the highlights of the programmatic relief are a revised account distribution system, the appointment of independent external experts charged with developing innovative, novel programs impacting business and development opportunities for women financial advisors, and the appointment of an independent Diversity Monitor who will review account distribution data and other reports impacting fairness and equal opportunity in the brokerage house. Mr. Sprenger explained that “a key feature of the settlement is the creation of a new monitoring system to ensure that the Settlement is carried out as intended.”
Settlement discussions between Plaintiffs’ Class Counsel and Morgan Stanley began in April 2005, after Plaintiffs’ Class Counsel informed Morgan Stanley of their allegations that Morgan Stanley engaged in nationwide gender discrimination against its female Financial Advisors. To facilitate these settlement discussions, the parties entered into a series of tolling agreements, the first of which was in March 2005, tolling the time period within which Plaintiffs needed to file individual and class claims of gender discrimination. To aid with the settlement negotiations, the parties in this action engaged the services of a prominent mediator, Hunter Hughes of Atlanta-based Rogers & Hardin, LLP.
Martha Burk, former Chair of the National Council of Women’s Organizations and now Director of NCWO’s Corporate Accountability Project, praised the Plaintiffs for their bravery in coming forward. “Only through the courage of women like these plaintiffs can women down the road be spared unequal treatment in the workplace. The reforms that will come out of this case will have repercussions far beyond a single case,” she said.
More Information
For more information, contact us by telephone at (202) 822-5100 or by email at
info@findjustice.com.
