Sixty-seven former or current female employees at Morgan Stanley will share $40 million set aside last year when the Wall Street firm settled sex-discrimination claims, the Equal Employment Opportunity Commission said yesterday.
The company agreed last summer, just before the EEOC case went to trial, to pay $54 million to settle claims that Morgan systematically underpaid and failed to promote women. Of that amount, $12 million was earmarked for Allison Schieffelin, who brought the suit, and more than 300 mid- and high-level women in the institutional equities division were eligible to file claims for part of $40 million. The other $2 million was set aside to improve diversity and create programs to address and prevent discrimination.
The company, which did not admit guilt, also made a three-year commitment to have an outside monitor field employee complaints and assess Morgan's compliance.
A retired federal appeals judge, Abner J. Mikva of the District, was appointed to decide which claims were valid and to determine how much money each woman would be awarded.
"We're pleased the process has been concluded. Morgan Stanley remains committed to diversity and to promoting equal opportunities throughout the firm," said Melissa Stonberg, a company spokeswoman.
Michelle A. Caiola, the EEOC's senior trial attorney in New York, said all the women who filed claims received a portion of the $40 million settlement. She would not disclose how much individuals received.
Caiola said she was "not so surprised" at the relatively small number of women who filed claims "because throughout the litigation, women were fearful of repercussions." Many of the women feared they would be blacklisted from Wall Street jobs if they filed claims, she said.
The case is one of the largest EEOC sex-discrimination settlements. The biggest was the 1997 settlement with Publix Super Markets Inc. for $81.5 million. AT&T Technologies Inc. settled for $66 million in a pregnancy discrimination case in 1991. Salomon Smith Barney -- now part of Citigroup Inc. -- and Merrill Lynch & Co. have paid millions of dollars to settle sex-discrimination claims.
The Morgan Stanley lawsuit began in 1998 when Schieffelin filed a discrimination complaint, complaining she had been passed over for a promotion. The EEOC filed suit Sept. 10, 2001, on behalf of Schieffelin and the women who had worked in the top tiers of her division since 1995. By that time, Schieffelin had been fired.
The settlement occurred after a trial jury had already been picked. Some women's advocate groups hoped the suit would go to trial to highlight women's continuing problems at the male-dominated Wall Street firms. Up to 20 current and former Morgan Stanley employees were expected to testify about the work environment, where they said they were denied promotions and raises and were exposed to lewd and sexist behavior, including all-male outings to strip clubs and hostile comments.
"A lot of people think we're past that point of blatant discrimination, and this case shows we aren't," Debra L. Ness, president of the National Partnership for Women & Families, formerly the Women's Legal Defense Fund, said yesterday. "When it gets highlighted in such a public way as this . . . it encourages employers to eliminate discrimination and educate their own managers about what's appropriate and not appropriate and the importance of implementing policies."