Morgan Stanley Sex Discrimination

SHOULD YOU CALL?

The court preliminarily approved the settlement on July 17, 2007. The deadline to file a claim form has passed. If you wanted to submit a claim form in the case, your claim form must have been postmarked on or before September 24, 2007. If you have questions relating to the terms of the settlement, your best option is to review the settlement documents located on our Pleadings page. If after reviewing those documents you have any questions, please call Plaintiffs’ counsel toll free at (866) 464-9097 or (800) 950-6231 or at any of the telephone numbers or e-mail addresses listed on the Firms page.

FREQUENTLY ASKED QUESTIONS ABOUT THE SETTLEMENT FOR MORGAN STANLEY CLASS MEMBERS

What is the lawsuit about?

In this lawsuit, the Named Plaintiffs claim that women Financial Advisors and Registered Financial Advisor Trainees at Morgan Stanley received less compensation than similarly situated men as a result of account distributions, partnerships, acquisition of the books of business of retiring Financial Advisors, and other opportunities which were not afforded to women in a manner equal to their male counterparts. The Named Plaintiffs also claim that Morgan Stanley denied them equal opportunities to acquire branch management positions, denied them equal terms and conditions of employment, and terminated them on the basis of sex. Some of the Named Plaintiffs assert other individual, non-class claims, such as age discrimination. You can read all of the plaintiffs’ claims in the Amended Complaint, which can be found on the Pleadings page of this website.

Who is a member of the Class?

If you received the Class Notice in a mailing addressed to you, then Morgan Stanley’s records show that you are currently employed, or were previously employed, by Morgan Stanley as a Financial Advisor or Registered Financial Advisor Trainee at some time between August 5, 2003 and June 30, 2007. Therefore, you are considered a Class Member.  

How many class members are there?

2,867 names are on the class list. The number encompasses all Financial Advisors and Registered Financial Advisor Trainees.  

Has the Court approved the settlement?

Yes.  The final approval hearing was held on October 11, 2007.  On October 26, 2007, Judge Richard Roberts granted final approval to the settlement.

What are the terms of the Settlement?

A general description of the terms of the Settlement is located in the Class Notice. If you want to read the Settlement Agreement in its entirety, it is available on the Pleadings page of this website.

How much money will I get?

Class Members, including the Named Plaintiffs, who filed a timely Claim Form will have their claim reviewed by a Special Master appointed by the Court. Class Members who submit a Claim Form will be eligible to receive monies based on a formula (the “Allocation Formula”) which will have two components: (1) an Earnings Regression Component developed by statistical experts and (2) a Claim Form Survey Component to be determined by a Special Master. Each of these two components will constitute fifty percent (50%) of the formula.

Earnings Regression Component. A Financial Advisor Class Member, including a Named Plaintiff whose annual earnings in any year during the liability period fall below an annual earnings curve which is set at two standard deviations above the mean earnings curve for male Financial Advisors (controlling for registration date and branch/office location), shall be eligible to receive a monetary award from the earnings regression component for that year.

Once it is determined that a Claimant is eligible for a monetary award from the earnings regression component for a particular year, the calculation of the monetary award will take into account the Claimant's earnings during that year and shall control for the following variables: a) the Claimant's length of tenure at MS-GWMG as a Financial Advisor; b) the Claimant's registration date; and c) the Claimant's branch office location. A separate, comparable earnings regression model will be conducted with respect to Registered Financial Advisor Trainees. The earnings regression component will be developed by Class Counsel's expert with input from MS-GWMG.

Claim Form Survey Component. The Special Master shall make allocations under the Claim Form survey component by taking into consideration: (1) information provided by Class Counsel and information contained in the Claim Form submitted to the Special Master concerning the Claimant’s (i) individual contribution to the prosecution of this action; (ii) individual evidence of alleged sex discrimination presented on the Claimant’s Claim Form; (iii) individual evidence supporting an award of compensatory damages; and (2) the release of individual claims that were filed in an EEOC charge on or before December 31, 2006 and that go beyond the scope of the settled class claims. Based on information provided by MS-GWMG, the Special Master may modify allocations to be made under the Allocation Formula based on any data or information specific to the Claimant’s branch/office, including information regarding persons who previously signed a release that covered sex discrimination claims. Subject to Court approval of the rationale and methodology upon which the proposed allocation and distribution are based, the Special Master will have sole and final authority as to the final distribution.

The information provided on the Claim Form may be verified for accuracy against Morgan Stanley’s computerized personnel, payroll, commission, or account data, or documents provided by claimants. The claims of Claimants will then be determined by the Special Master, with 50% of the funds distributed based on a statistical analysis comparing the claimant’s earnings with earnings of similarly situated men, and 50% of the funds distributed based on individual responses to questions on the Claim Form. 

Based on the overall formula and calculations determined by the Special Master, the Court will approve the rationale and methodology upon which the allocation and distribution are based. The final distributions will be filed with the Court under seal to protect Claimants’ confidentiality. At this time, it is not possible to predict how much money a particular Claimant will receive.

When Will I Receive My Settlement Check?

Settlement checks for all those class members who submitted a timely Claim Form will be sent out no earlier than the second quarter of 2008.  If your address changes, please make sure to update that information with class counsel.

How many class members will participate in the monetary portion of the settlement?

The Claims Administrator has received 1019 Claim Forms so far.  Some of these Claim Forms will be deemed ineligible, for example, if they were submitted after the deadline or were sent from someone who is not in the class.

What is the total amount of money available for distribution to class members?

The Settlement Fund is $46 million, but administrative expenses and attorneys’ fees will be deducted from this amount, and any accrued interest will be added, before the money in the fund is distributed to class members. After deduction of Court-awarded attorneys’ fees and accrual of interest at current rates, there will be approximately $32 to $34 million available to be distributed to class members.

Are there tax consequences for any money I might get?

Any award you receive from the Settlement Fund will have tax consequences for you. The Claims Administrator will be responsible for withholding, remitting and reporting each Claimant’s share of payroll taxes from the Settlement Fund. Morgan Stanley will be responsible to pay for the employer’s share of taxes and costs, including FICA, FUTA, SUTA and Medicare. The Claims Administrator will withhold the employee’s share of taxes and costs, including any applicable FICA, FUTA, SUTA and/or Medicare, from Claimants’ awards and remit those amounts to the appropriate taxing authorities. Class Counsel are not tax advisors and cannot give you advice on any tax matters. Class Counsel urge you to consult your tax advisor for answers to any questions you may have about the tax implications of any potential award.

What is the deadline to file a Claim Form, object to the settlement, etc.?

The deadlines to file a Claim Form, object to the settlement, or opt-out of the monetary relief have passed.

How will the lawyers be paid?

In connection with the Settlement, the Court awarded Class Counsel attorneys’ fees and expenses out of the Settlement Fund. Class members who receive awards from the Settlement Fund, will not owe any fees or expenses to the lawyers who have represented the Class. The attorneys’ fees and expenses of Class Counsel, as awarded by the Court, will be paid only from the Settlement Fund.

As is routine in class action cases, Class Counsel filed a motion for an award of attorneys’ fees and expenses already incurred as well as the fees and expenses that will be incurred during the five-year term of the Settlement. In its motion, Class Counsel requested that the Court award them attorneys’ fees and expenses in the amount of 26% of the proposed $46 million monetary settlement, plus $300,000 per year during the five-year term of the Settlement to cover future fees and expenses relating to monitoring and enforcing the Settlement, plus interest accruing on all these amounts until disbursement to Class Counsel. The Court has granted this request.

Class Counsel have pursued these claims on behalf of Plaintiffs and the Class without receiving any compensation for their services or reimbursement of their out-of-pocket expenses. Class Counsel have undertaken substantial risks in pursuing this matter. They have done so with the understanding that, if they obtained a recovery for the class, their expenses would be reimbursed and they would receive fees from the fund recovered.

Who can I contact for further information?

If you have further questions, you should contact class counsel at 800-950-6231 or 866-464-9097.

Confidentiality: If you provide us with information relevant to the claims asserted against Morgan Stanley, we may have to reveal your name and contact information to the company. To the extent allowed by law, however, we will keep the substance of the information that you provide to us confidential. By submitting this information to us, you intend, as do we, that all the information you provide will be privileged from disclosure to Morgan Stanley. However, Morgan Stanley may seek the information, and we cannot guarantee that the judge will not compel us to produce it.

Retaliation: Any retaliation by the company, its affiliates or subsidiaries against you for exercising your legal rights by participating in the suit, providing us with information, or otherwise assisting us, may provide you with a separate basis for bringing a suit. The law prohibits retaliation by Morgan Stanley whether you are a current or former employee. Please immediately report to us any act that you consider retaliatory to us immediately.

Restrictions on Sharing Privileged Information: You may initiate a contact with us if you have not worked in a human resources, managerial or legal function at Morgan Stanley. We would like to speak with you if you have any non-privileged information concerning any type of conduct alleged in the lawsuit, and regardless whether you are interested in participating as a claimant or in only providing information. It does not matter if the information pertains directly to you or to other Morgan Stanley employees. However, you should not discuss with us or provide any privileged communications you may have received from Morgan Stanley or its internal or external attorneys. If you have non-privileged documents, computer-readable material, video or audiotapes, that you wish to share with us, please let us know that as well. DO NOT take from Morgan Stanley’s premises or provide to us any company documents that are marked “attorney-client privileged” or documents or information received from an attorney who represents the company. Also do not take any documents from Morgan Stanley’s premises that you are not authorized to possess. We cannot and must not review or discuss such documents or information with you. Please contact us at the address or telephone number listed on the Firms page to set up an appointment.