Morgan Stanley settles sex-bias claims
NEW YORK – Wall Street brokerage Morgan Stanley agreed Monday to pay $54 million to settle claims of widespread sex discrimination at the firm, including strip-club outings with clients and higher pay for men.
The settlement was announced just as a jury, including eight women, was to hear a trial in the case, brought by the Equal Employment Opportunity Commission and former Morgan Stanley bond seller Allison Schieffelin.
Schieffelin, who claimed she was denied promotions at the firm because she is a woman, will be paid $12 million under the settlement, with $40 million earmarked for claims filed by other women at the firm.
Morgan Stanley will also set aside $2 million to pay for diversity training and anti-discrimination programs.
“The consent decree is a watershed in safeguarding and protecting the rights of women on Wall Street,” said U.S. District Judge Richard M. Berman, who was to have heard the case.
A trial would have meant weeks of ugly publicity for Morgan Stanley. The EEOC had planned to call as witnesses more than two dozen women to establish what it called a pattern of discrimination.
The EEOC represented hundreds of women who claimed men at Morgan Stanley invited clients on men-only strip club outings, groped women and made lewd comments.
In addition, the EEOC claimed women were passed over for promotions because of their gender. Morgan Stanley acknowledged that few women were promoted to the highest levels of the firm but denied discrimination.
Schieffelin, 42, who made $1.35 million in 1998, was fired in 2000 after claiming she was passed over for a promotion to managing director. She has said Morgan Stanley “destroyed my career.”
She hugged her parents and supporters in court Monday after the settlement was announced.
“I have one comment: What I want to say is that I am so happy that there is a great settlement that’s good for everybody,” Schieffelin said outside court.
The case was to have been the EEOC’s first sex discrimination trial against a Wall Street firm. Most similar cases end in settlements, but talks in the Morgan Stanley matter, filed in September 2001, collapsed last year.