The Women on Wall Street Project began as a joint initiative of M&S and the National Council of Women’s Organization to remedy the historic pay disparities impacting women working in the financial sector. Since its inception, the project has revealed a great deal about Wall Street’s failures to allocate business opportunities to its female financial advisors.
Beyond exposing this long-running inequity, we challenged some of the largest financial titans – and won. In 2007, we settled a class action lawsuit against Morgan Stanley & Co. for nearly $47 million on behalf of female plaintiffs who had alleged gender inequity in the distribution of accounts and other business opportunities. In 2008, we settled a similar case against Smith Barney for $33 million. And in early 2011, we settled our third case, this one regarding compensation and promotion practices against Wells Fargo/Wachovia for $32 million.
In each of these victories, M&S went beyond financial remuneration to require each Wall Street firm to change policies regarding account distributions, partnership arrangements, retention, diversity training, and other management responsibilities. We have established a firm foundation for gender equity on Wall Street for years to come.
The gender discrimination class action was filed by three female financial advisors on behalf of female financial advisors who were employed by Wells Fargo Advisors/Wachovia Securities.
The class settlement resolves claims of gender discrimination in compensation, promotions to branch management positions, and terms and conditions of employment under Title VII of the Civil Rights Act of 1964 or any state or local anti-discrimination law. It includes a $32 million fund from which awards, attorneys’ fees and costs were paid. In addition to the $32 million fund, the Defendants paid all costs of claims administration in this class action. There are approximately 3,060 women who are members of the Class affected by the settlement.
The settlement also requires the company to make significant changes to its internal policies and practices. We are continuing to monitor the company’s compliance with its obligations to improve policies and practices impacting female financial advisors.
On March 31, 2005, plaintiffs in northern California filed a nationwide class-action lawsuit on behalf of female Financial Consultants who alleged that Smith Barney discriminated against them in allocating accounts, business leads, referrals, partnership opportunities, and sales support. In November 2006, an amended complaint was filed, which added additional plaintiffs from southern California and Florida, and amplified and clarified the allegations in the complaint with evidence the plaintiffs had obtained through extensive discovery.
Settlement. On August 13, 2008, U.S. District Judge Phyllis Hamilton granted final approval to a four-year settlement agreement that provides for comprehensive injunctive relief and significant monetary relief for the following settlement class. The settlement class included all women employed as Financial Advisors in (i) any United States branch of Smith Barney’s retail brokerage division at any time from August 30, 2003 through March 1, 2008; or (ii) the California branches of Smith Barney’s retail brokerage division at any time from June 25, 2003 through March 1, 2008.
The settlement requires programmatic relief – changes to Smith Barney policies regarding account distributions, partnership arrangements, branch manager promotions, retention, diversity training, and complaint processing, among other things. An independent Diversity Monitor and an independent Industrial Psychologist were appointed to effectuate the terms of the settlement. Attaining the programmatic relief and the independent oversight of its implementation guaranteed our clients the opportunities they have earned and ensures that female Financial Advisors employed by Smith Barney in the future will not face the same discriminatory environment. When Smith Barney and Morgan Stanley merged, the programmatic relief in this settlement was combined with the programmatic relief in a related case against Morgan Stanley. Mehri & Skalet is continuing to monitor the company’s compliance with its obligations to improve its policies and practices.
In addition, the settlement provided financial relief, establishing a class settlement fund of $33 million plus accrued interest.
Mehri & Skalet represented a class of female Financial Advisors and Registered Advisor Trainees who were employed by Morgan Stanley in their Global Wealth Management Group. The focus of the lawsuit was gender inequality in the business practices of Morgan Stanley, which was evident in the inequitable distribution of accounts and other opportunities for female employees. The named plaintiffs, eight women from five states, on behalf of themselves and a class of about 2,700 fellow female Morgan Stanley Financial Advisors, filed an amended complaint alleging discrimination on April 24, 2007. These womentook a critical step in the fight for improved working conditions for women across the financial services sector.
Settlement. On October 26, 2007, Judge Richard Roberts, United States District Judge for the District of Columbia, approved a settlement with Morgan Stanley & Co. Incorporated f/k/a Morgan Stanley DW Inc., on behalf of approximately 2,700 female Financial Advisors and Registered Financial Advisor Trainees employed at Morgan Stanley at any time since August 5, 2003.
The settlement contains programmatic relief – or changes to policies and practices – to help prevent discrimination against female financial advisors in the future. When Morgan Stanley and Smith Barney merged, the programmatic relief in this settlement was combined with the programmatic relief in a related case against Smith Barney. Mehri & Skalet is continuing to monitor the company’s compliance with its obligations to improve its policies and practices.