In a significant arbitration employment law award in North Carolina, global financial services provider Morgan Stanley was ordered to pay over $1.6 million for sex and age discrimination against a 51-year-old white male plaintiff. The ruling came after several years of arbitration and a nine-day trial.
Plaintiff Employee’s Allegations
Attorney Josh Van Kampen of Van Kampen Law represented the plaintiff, Charles Randall, who was awarded back pay, punitive damages, and attorneys’ fees and costs. The arbitrator, Terrence Lee Croft of Atlanta, found institutional bias in favor of women at Morgan Stanley, claiming the company operated with a corporate culture favoring women over older white males.
Workplace discrimination was so evident that it was highlighted in a “smoking gun” video produced for a Morgan Stanley annual meeting.
non-diverse Discriminatory Bonus Plans
The arbitrator’s findings revealed that Morgan Stanley had a facially discriminatory bonus plan that incentivized discrimination in favor of women, Latinos, and African Americans. Managers were even financially penalized for not meeting diversity metrics, leading to the wrongful termination of nondiverse employees to make room for diverse new hires.
Exclusion of Males from Awards
The plaintiff’s counsel argued that had Mr. Randall been female or substantially younger, he likely would not have been terminated, highlighting Morgan Stanley’s deliberate exclusion of males from an award recognizing only women across wealth management.
Morgan Stanley’s Defense
Morgan Stanley disagreed with the decision and petitioned a federal court to vacate the arbitration award, claiming the arbitrator had evident partiality. The defendant alleged that the arbitrator failed to disclose his past fraud claims against a predecessor of Morgan Stanley, accusing the arbitrator of sleeping through critical portions of the hearing.
Defense of the Arbitrator
The counsel for the plaintiff defended the arbitrator’s integrity and accused Morgan Stanley of unfairly attacking him after hiring a private investigator to delve into his past. They argued that Morgan Stanley only raised the issue of the arbitrator sleeping through portions of the hearing after they lost the case.
In the end, despite the odds, Mr. Randall prevailed on all claims, winning a significant award against Morgan Stanley for sex and age discrimination. The case shed light on issues of institutional bias and the use of incentivized diversity metrics within the company.
Wider trends of reverse discrimination lawsuits
Employment attorneys have noticed an uptick in “reverse discrimination” cases, wherein white and male employees claim unequal treatment compared to their female and non-white counterparts. Some lawsuits argue that progressive discipline practices are applied less frequently to white males, leading to abrupt terminations for minor performance issues.
The fear of conventional employment discrimination lawsuits, coupled with efforts to promote diversity and inclusion, can lead companies to make decisions that inadvertently result in reverse discrimination claims. The law requires employers to treat all employees equally, regardless of demographic factors.
The information in this summary is based on the article “Arbitrator Awards $1.6M for Institutional Bias at Morgan Stanley” written by Heath Hamacher and published on July 12, 2023, on NC Lawyers Weekly. For the full article, visit NCLawyersWeekly.com.