Morgan Stanley settled a sex bias class-action lawsuit for $46 million on Tuesday. The suit was brought against the Wall Street firm by eight former and current employees who charged that Morgan Stanley deprived them of the trainings, pay raises, and opportunities for promotion that were available to male employees.
Tuesday’s settlement, which must be approved by the US District Court in Washington, will also overhaul the firm’s methods of distributing cases, which the plaintiffs argue favored men. Without a formalized procedure, male favoritism “kind of institutionalizes historical bias from the freewheeling wild west days,” Cyrus Mehri, a representative of the plaintiffs, told the New York Times. Now, the company will be required to automate the assignment of accounts and document how accounts are distributed. Morgan Stanley will also spend $7.5 million to hire two industrial psychologists and to analyze the effectiveness of the new measures.
Morgan Stanley has settled two other sex discrimination cases, one in 2004 — when women comprised only 37 percent of all Wall Street employees — and another in 2005. Female employees have long complained that a male-dominated culture prevails on Wall Street, where male branch managers give the new or most successful accounts to their male friends, hindering women’s attempts to advance their careers. The 2004 suit also claimed that men-only events were planned at strip clubs and golf courses, excluding women from meeting with clients.