In a surprise announcement, Morgan Stanley agreed to pay $54 million to settle sex-bias charges rather than proceed with a trial, Reuters reported.
The lawsuit had been filed nearly three years ago by the U.S. Equal Employment Opportunity Commission on behalf of more than 300 women who have worked in the company’s institutional-equities division since 1995, according to the wire service. Reuters noted that this was the first sex-bias lawsuit by the EEOC against a Wall Street bank to begin trial.
Indeed, on Friday, a jury of eight women and four men was seated in the Manhattan courtroom of U.S. District Judge Richard Berman. But yesterday, Judge Berman announced the settlement just as opening statements were to begin.
Under terms of the settlement, former bond seller Allison Schieffelin, whose 1998 complaint to the EEOC led to the suit, will receive $12 million of the $54 million in damages, Bloomberg reported. Another $40 million will go toward a claims fund, according CBS MarketWatch, and $2 million will be devoted to implementation and training.
In settling, Morgan Stanley denied any discrimination took place but agreed to take “far-reaching” steps, Bloomberg noted. The investment-banking giant will also avoid potentially embarrassing testimony from women who claim they were denied raises and promotions while putting up with lewd male behavior that went unpunished.
Settlement talks had fallen apart last year, according to the Associated Press, but over the weekend the chief executive officer of Morgan Stanley and the chair of the EEOC had become personally involved in the discussions. “We’re very pleased that Morgan Stanley agreed to work with the commission,” EEOC lawyer Elizabeth Grossman reportedly told the judge. “We hope this sends a message to other employers on Wall Street.”