Facts

From Oct. 12, 2002 to Dec. 3, 2007, members of the plaintiff class, which included African-American and Latino Financial Advisors and registered financial advisor trainees, worked for Morgan Stanley, defendant, in the Global Wealth Management Group. The representative plaintiff sued defendant under 42 U.S.C. Section 1981 on the basis of racial discrimination.

PLAINTIFF'S CONTENTIONS:
The representative plaintiff argued that she was discriminated against on the basis of race when defendant offered her and other class members fewer business opportunities than comparable white financial advisors and registered financial advisor trainees. She argued they were discriminated against in compensation and assignment policies.

DEFENDANT'S CONTENTIONS:
The defendant contended that plaintiff and the class were not discriminated against on the basis of race.

Damages

Plaintiffs sought in excess of $36 million for race-based compensation disparities.

Result

The case settled for $16 million plus interest from the date of preliminary approval. Defendant also agreed to the following: to distribute its non-discrimination and anti-harassment policy to all employees, to provide employees mandatory training, to maintain its commitment to increasing recruiting and outreach to enhance diversity in the financial advisor position, and to make manager compensation tied to diversity measurements. Defendant further agreed to change the process of how accounts are distributed to financial advisors so that greater emphasis would be placed on current performance. Moreover, the defendant promised it would continue its policy not to discriminate on the basis of race or color in hiring, compensation and business opportunity assignments.