Morgan Stanley settles bias case for $54m -- WorldTradeStocks.com

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Subject:

Morgan Stanley settles bias case for $54m

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2004_TRADERS

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Date Posted: 19:26:16 07/12/04 Mon

Morgan Stanley settles bias case for $54m
By David Wells and Richard Beales in New York
Published: July 13 2004 5:00 | Last Updated: July 13 2004 5:00

Morgan Stanley yesterday agreed to pay $54m (�29m) to end a sex bias trial in a last-minute settlement with the US Equal Employment Opportunity Commission.

The case was the first sex bias suit launched by the EEOC against a Wall Street investment bank that reached trial. A jury was picked on Friday and opening statements were about to begin in a crowded courtroom in New York when the surprise settlement was announced. Other cases have been settled before trial.

The settlement comes as City firms say they are experiencing a rise in discrimination cases in London. While some of these focus on lewd behaviour, those alleging discrimination over promotion, bonuses and pay have also been increasing. Last month Stephanie Villalba, a senior banker in Merrill Lynch's private client business, brought a �7m claim against her employer, the largest action against a City institution yet seen at a British employment tribunal.

The EEOC enforces US laws that protect workers from mistreatment due to bias. Its case against Morgan Stanley alleged a "pattern or practice" of discrimination against women in the bank's Institutional Equity Division. The agency alleged that women were systematically denied equal compensation and promotion at Morgan Stanley. More than 20 witnesses were scheduled to represent the experiences of as many as 340 women in the EEOC's case.

Morgan Stanley, under the terms of the settlement, denies any discrimination, but agreed to take steps to change its workplace, including providing additional training on compensation and diversity.

Allison Schieffelin, a former bond seller whose 1998 complaint led to the EEOC suit, will receive $12m of the $54m in damages. Other women in the case will share $40m. If any part of that sum is left over, it will go towards scholarships for women interested in working in financial services. The remaining $2m will be used to cover the costs of implementing aspects of the settlement. Ms Schieffelin claimed she had been denied a managing director's post. Morgan Stanley said it fired her in 2000 after she had a row with her boss. She told reporters outside the packed court that she was glad a settlement had been reached that was "good for everybody".

It is unusual for a case of this kind to go as far as a full trial. Previous cases, most prominently a raft of allegations against Merrill Lynch and Citigroup, have mostly been settled in arbitration.

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