Morgan Stanley agreed yesterday to pay $54 million to settle a sex discrimination case rather than stand trial on the federal government’s accusation that it denied equal pay and promotions to women in a division of its investment bank.
The settlement, which could cover as many as 340 women, is the second largest the Equal Employment Opportunity Commission has reached with a company it sued and is the first with a major securities firm…
The $54 million settlement is the second-biggest sex discrimination settlement with the E.E.O.C. behind the $81 million that Publix Super Markets agreed to pay in 1997.
At least $12 million of the money to be paid by Morgan Stanley will go to one woman, Allison K. Schieffelin. Ms. Schieffelin, 42, was a successful bond saleswoman for Morgan Stanley, earning more than $1.3 million a year, when she first complained that she had been denied a promotion to managing director because of her sex. The commission took up her cause, eventually filing suit against the company on Sept. 10, 2001, under federal civil rights laws. The commission is charged with enforcing those laws in the workplace.
Ms. Schieffelin, who said in interviews with The New York Times in 2002 that she had sacrificed her personal life to get ahead at Morgan Stanley, was scheduled to testify first for the commission. She was eager to tell of the treatment she had endured and witnessed on the trading floor at Morgan Stanley’s headquarters near Times Square, followed by the testimony of more than 20 other women with similar complaints, some involving behavior that could have proved embarrassing to the company…
The settlement ended the first phase of resolving the disputes between the company and women who worked in the division since 1995, including Ms. Schieffelin. Of the $54 million, $40 million will be set aside for women who qualify to make claims under the consent decree.
Those claims will be considered by a special master, Abner Mikva, who is a former federal judge. After hearing them all, he will decide how much of the $40 million, if any, each woman will receive.
Ms. Schieffelin will file a claim in that process, her lawyer, Wayne N. Outten, said. He would not say how much of the $40 million she would seek, but an actuary Mr. Outten hired in preparation for trial estimated her lost income to be $33 million to $72 million.
Ms. Schieffelin declined to comment yesterday beyond praising the agreement as “a great settlement that’s good for everybody.”