Wall Street: zero. Women: five. Or is it zix? It’s not easy keeping track of the gender discrimination suits filed by female advisors against their firms over allegedly piggish working environments. (Well, wait, it’s not alwayswomen filing gender discrimination suits.)
Whatever the score, Morgan Stanley decided it will shell out over $46 million to 2,700 female advisors and trainees who say the firm discriminated against them with respect to account distributions, compensation, training and promotions. The settlement is awaiting approval by the U.S District Court in Washington D.C.
In addition to the millions in monetary relief, Morgan has agreed to change company policies that plaintiffs say were the source of the discrimination they experienced. For example, a revised methodology used to determine account distribution will be made available to advisors with an explanation of the system. The firm will also appoint two psychologists to help develop diversity programs to attract and retain female advisors, and a “diversity monitor” to ensure the new policies are being implemented. The settlement terms are set to last five years.
Cyrus Mehri, attorney for the plaintiffs, says, “This system has checks and balances in place” to monitor and report on the progress and shortcomings at Morgan Stanley.
“We are firmly committed to the initiatives we will be undertaking to attract and retain women financial advisors and help them be as successful as possible, and pleased to resolve a legal matter stemming from the past. Our goal – across the organization – is to be the employer-of-choice for talented women,” said Caroline Gundeck, head of the Global Wealth Management Group Office of Diversity.
If approved, the settlement amount would be the second largest paid by the firm in a gender discrimination case. In 2004, the firm’s Institutional Equity Division settled with the U.S. Equal Employment Opportunity Commission (EEOC) for $54 million in a gender discrimination case. (Click here to read more about that suit.) That settlement also included an allocation of $2 million to diversity programs designed to enhance the compensation and promotional opportunities for female employees within Morgan.
But, only three years later, Morgan is again opening its money vault to women who apparently felt the first round of diversity programs didn’t achieve much. Mehri contends that the latest developments will put Morgan at the forefront of fairness in the workplace. “I don’t think you can ask for a better reform,” he says.