Morgan Stanley and its former chief diversity officer, Marilyn Booker, reached a deal Friday to end the lawsuit Booker brought last year against the bank and two of its executives, alleging "race and gender discrimination, retaliation and unequal pay.”
The plaintiff and defendants "jointly stipulate to the dismissal with prejudice of Booker's claims in the instant action, with each party to bear its own costs and attorneys' fees,” lawyers for both sides agreed in paperwork filed with the U.S. District Court for the Eastern District of New York.
Dismissals with prejudice often indicate out-of-court settlements, with the condition that the plaintiff won’t file a similar lawsuit against the defendants in another venue.
Details of the settlement were not publicized. An attorney for Booker and a spokesperson for Morgan Stanley did not immediately respond Monday to requests for comment.
Booker alleged Morgan Stanley fired her in December 2019, amid a round of 1,500 job cuts, in retaliation for repeatedly urging the bank to create a plan to promote people of color and improve the experience of nonwhite employees at the bank.
She sought unspecified damages and a judgment that would have barred the bank from discriminating against her and other Black women. The suit — against the bank, CEO James Gorman, and Booker’s former boss, Chief Administrative Officer Barry Krouk — included a claim alleging unequal pay on behalf of more than 40 Black women employees.
The suit also asked a federal district court to order Morgan Stanley to abolish behind-closed-doors arbitration as the default means of dealing with discrimination allegations brought by Black employees.
The court had set oral arguments in the case for November. The bank, which called Booker’s allegations "sweeping, sensationalized and conclusory,” had sought in March to have the case dismissed, Law360 reported.
Booker filed the lawsuit in June 2020, roughly three weeks after the killing of George Floyd by police set off a surge of corporate maneuvers to demonstrate awareness of racial inequality and the desire to fix them. Gorman described Floyd’s death and the ensuing societal response as a "turning point in race relations." The bank, shortly after, promoted two Black women to senior leadership committees. And Morgan Stanley gave $25 million in May and June of last year to minority depository institutions, the NAACP Legal Defense & Education Fund and to community development financial institutions hard-hit by COVID-19.
In her 47-page complaint, Booker described the bank’s actions in the wake of Floyd’s death as hypocritical. Regarding the bank's past conduct, Booker said in her suit, "clearly, Black lives did not matter at Morgan Stanley."
Booker said the bank, between 2012 and 2020, named 1,382 managing directors — of whom 41, or fewer than 3%, are Black.
"For Black [managing directors] departing Morgan Stanley, the sentiment at the firm was 'good riddance' and 'glad to see you go,' rather than, 'why are they leaving us?' or 'how could we do better?'" Booker said in her suit. "In contrast, when White [managing directors] left or sought to leave, the firm made significant efforts to retain them."
Morgan Stanley data shows 2.2% of the bank’s U.S. executives are Black, according to Bloomberg.
Booker served as Morgan Stanley's first global head of diversity from 1994 to 2010. During that time, she said, she helped manage recruitment, drafted an employee handbook, managed the firm's affirmative action plans, performed community outreach and testified before Congress in 2008 about diversity at the bank. Booker said in her suit she felt she was "trotted out" as a token minority at public events.
Booker said she was "inexplicably" moved to a new position focusing on financial literacy for nonwhite communities after Gorman was named CEO in 2010. When that job was eliminated, outgoing CEO John Mack created a new role for her, leading the Urban Markets Group, in which she sought to win more Black money-management clients and help Black communities build wealth. However, by 2019, Booker said, the bank cut the group's budget by 71%, hindering its outreach potential.
In a pay-related matter, Booker said she was given no commission for helping Morgan Stanley land a $90 million account with Webster University, the Financial Times reported.
