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The Economist, July 15 2004 On July 12, Morgan Stanley, a corporate finance leader, settled a sex discrimination lawsuit brought against them by Allison Schieffelin, a bond trader who had been fired by Morgan Stanley over four years ago. In the settlement, Schieffelin will receive $12 million, and another $40 million will be available to any of the 340 women who worked in Schieffelin’s department who can prove that they were also discriminated against. Another $2 million will go towards corporate education hoped to curb sex discrimination.
It is likely that Morgan Stanley agreed to the settlement because they wanted to avoid the embarrassment associated with having the activities of some of its employees aired in public. They also probably did not want to disclose many of their corporate salaries and incentive plans. As for the actual case, the odds of winning were in their favor.
To lose, the Equal Employment Opportunity Commission (EEOC), who officially brought the case against Morgan, would have had to prove that sexual discrimination occurred throughout the entire company. In the case of Schieffelin alone, that might have been hard to prove—given that she was making over $1 million at the time she was fired and the only other co-worker making more was another woman.
