Case: Jaffe v. Morgan Stanley DW, Inc.

3:06-cv-03903 | U.S. District Court for the Northern District of California

Filed Date: June 22, 2006

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Case Summary

On June 22, 2006, female financial advisors working for Morgan Stanley, a retail financial services firm, filed this lawsuit in the U.S. District Court for the District of Northern California against their employer. The plaintiffs, represented by private counsel, were female and minority financial advisors employed by the defendant. They claimed that the defendants' substantially male branch managers had near unfettered discretion over compensation and distributing business to the advisors. Fin…

The plaintiffs, represented by private counsel, were female and minority financial advisors employed by the defendant. They claimed that the defendants' substantially male branch managers had near unfettered discretion over compensation and distributing business to the advisors. Financial advisors earned a commission and obtained clients by referral. The complaint alleged branch managers gave more business, assistance, and opportunities to male advisors; this was a systemic, continuing pattern and practice at Morgan Stanley. The lead plaintiff also alleged she was terminated for being female and over the age of 40. The complaint sought to certify a class of all female advisors employed by the defendant from January 5, 2005 to the present and a subclass of advisors who had worked in California.

The first complaint contained the following claims: (1) intentional discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq.; (2) disparate impact discrimination under the same statute; (3) gender discrimination in violation of the California Fair Employment and Housing Act, Cal. Gov't. Code § 12940 et seq; (4) on behalf of the named plaintiff only, age discrimination in violation of the Age Discrimination in Employment Act of 1967, 29 U.S.C. § 621 et seq.; (5) on behalf of the named plaintiff only, age discrimination under the California Fair Employment and Housing Act, Cal. Gov't. Code §12940 et seq. The complaint sought: a declaratory judgment; preliminary and permanent injunctions ordering the defendant to cease discrimination; an order restoring class members to previous positions or, in lieu thereof, front pay; back pay and benefits; damages for emotional distress and punitive damages; and attorneys' fees and costs.

The first amended complaint, filed on October 12, 2006, added another named plaintiff, who was a black Michigan resident. It also added a claim of gender discrimination under Michigan's Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq. and claims of race discrimination under: Title VII; 42 U.S.C. § 1981; and the Elliot-Larsen Civil Rights Act, M.C.L.A. §§ 37.2101 et seq. A final amended complaint, filed on August 17, 2007, added a third plaintiff, a black California resident. This complaint added claims for race and color discrimination under Title VII and 42 U.S.C. § 1981 on behalf of black and Latino subclasses.

Related Case & Gender Discrimination Claims

The defendant sought a stay of this action pending the outcome of settlement negotiations in a similar class action filed in the U.S. District Court for the District of Columbia. In Augst-Johnson v. Morgan Stanley DW, Inc., the plaintiffs also alleged gender discrimination. On January 19, 2007, the district court ordered a stay of the gender discrimination claims, which were eventually resolved by the settlement in Augst-Johnson. 2007 WL 163196 (S.D.N.Y. Mar. 15 2007). Thus, the Jaffe settlement dealt only with race discrimination claims.

Settlement Agreement

On February 11, 2008, the parties filed a copy of the proposed settlement agreement. The district court granted final class certification, approval of the proposed settlement agreement, and entered final judgment on October 22, 2008. 2008 WL 4667090 (S.D.N.Y. Oct. 22, 2008). The parties reached the agreement with the assistance of mediator Hunter Hughes, Esq., who had also mediated the Augst-Johnson case. The settlements term was five years. The settlement class was defined as "All African Americans and Latinos who were employed as Financial Advisors or Registered Financial Advisor Trainees in the Global Wealth Management Group of Morgan Stanley & Co. Incorporated or its predecessor(s) at any time between October 12, 2002 and the date of preliminary approval."

The settlement agreement required the defendant to: distribute its anti-harassment policy to all employees; retain an employee dedicated to increasing African American and Latino presence in the defendant's work force; work only with recruiters who would provide a diverse slate of potential employees; post all job openings on an internal job website; provide diversity training; create a more transparent and objective career path; change a "power ranking' system that rated financial advisors' performance; and implement a revised complaint process. The parties also agreed to jointly appoint a diversity monitor, Fred W. Alvarez, Esq., and industrial psychologists Dr. Kathleen Lundquist and Dr. Irwin Goldstein to assist with implementation of the changes. Monitoring included semi-annual reports to class counsel.

The defendant agreed to pay $16,000,000 to a settlement trust. A trust administrator would allocate the money to class members according to a formula based on their seniority, business generated, and other factors. The District Court also awarded $25,000 to an individual plaintiff for her efforts representing the class and $950,000 in attorneys' fees and costs for litigation; $150,000 of which was to monitor and enforce the settlement. The last entry on the District Court docket, on May 24, 2010, records the objecting class members' notice of appeal.

Objecting Class Members

On December 10, 2007, several putative class members filed a notice of objection and a motion for discovery regarding a proposed class certification and settlement agreement. Nonetheless, on February 7, 2008, in an unpublished order, the District Court denied the objectors' motion. Jaffe v. Morgan Stanley DW, Inc., No. 06-3903, 2008 WL 346417 (S.D.N.Y. Feb. 7 2008). The objectors continued to argue against the settlement, asserting that the plaintiffs could not adequately represent Latino class members and that the provisions for monitoring and implementation were not strong enough. However, the Court disagreed and felt the settlement adequately protected the class.

On July 16, 2008, the District Court allowed one of the named plaintiffs to transfer her individual claims to the U.S. District Court for the Eastern District of Michigan. Jaffe v. Morgan Stanley DW, Inc., No. 06-3903, 2008 WL 2782713 (S.D.N.Y. Jul. 16 2008). Furthermore, several dozen plaintiffs opted out of the settlement. The objecting class members filed an appeal in the U.S. Court of Appeals for the Ninth Circuit. The case appeared on the docket as Jaffe v. Glover, No. 08-17599.

In July 2010, appellees filed motions to dismiss for failure to prosecute and failure to provide a timely brief, which the Ninth Circuit granted. On September 7, 2011, following the merger of Morgan Stanley's Global Wealth Management Group and Citigroup's Smith Barney, the District Court approved a joint motion to modify the settlement start date to October 1, 2010 and granted several more specific modifications in light of the merger. Litigation over settlement fund distribution followed. Right before the settlement was due to expire, the parties filed a motion for extension of the settlement by two years on September 29, 2015, which the Court granted. The order also granted several modifications to the settlement, including the appointment of a Diversity Monitor and the continuation of settlement programs related to increasing participation of female, African American, and Latino Financial Advisors in teams and partnerships for an additional year past the settlement's expiration.

	Document
3:06-cv-03903 08-17599	Docket - Court of Appeals Jaffe v. Morgan Stanley U.S. Court of Appeals for the Ninth Circuit	Dec. 1, 2009	Dec. 1, 2009 Docket
1 3:06-cv-03903	Class Action Complaint For Injunctive And Declaratory Relief And Damages For Violations Of Title VII Of The Civil Rights Act Of 1964, 42 U.S.C. § 2000e et seq. And The California Fair Employment And Housing Act, Cal. Gov't Code § 12940 et seq. Jaffe v. Morgan Stanley	June 22, 2006	June 22, 2006 Complaint 2006 WL 5390674
25-1 3:06-cv-03903	First Amended Class Action Complaint For Injunctive And Declaratory Relief And Damages For Violations Of Title VII Of The Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq., The California Fair Employment And Housing Act, Cal. Gov't Code §§ 12940, Jaffe v. Morgan Stanley	Oct. 12, 2006	Oct. 12, 2006 Complaint 2006 WL 3619873
37 3:06-cv-03903	Joint Case Management Conference Statement And Rule 26(f) Report Jaffe v. Morgan Stanley	Oct. 24, 2006	Oct. 24, 2006 Pleading / Motion / Brief 2006 WL 3619979
67 3:06-cv-03903	Order Granting Defendant's Motion To Stay Class And Subclass Gender Discrimination Claims Jaffe v. Morgan Stanley	Jan. 19, 2007	Jan. 19, 2007 Order/Opinion 2007 WL 163196
81 3:06-cv-03903	Second Amended Class Action Complaint For Injunctive And Declaratory Relief And Damages For Violations Of Title VII Of The Civil Rights Act Of 1964, 42 U.S.C. §§ 2000e et seq., 42 U.S.C. § 1981, The California Fair Employment And Housing Act . . . Jaffe v. Morgan Stanley	Aug. 17, 2007	Aug. 17, 2007 Complaint 2007 WL 2888752
88 3:06-cv-03903	Plaintiff's Separate Memorandum Of Points And Authorities In Support Of Joint Motion For: (1) Preliminary Approval Of Class Action Settlement; (2) Provisional Certification Of Settlement; (3) Approval And Distribution Of Notice Of Settlement . . . Jaffe v. Morgan Stanley	Oct. 22, 2007	Oct. 22, 2007 Pleading / Motion / Brief 2007 WL 4919793
95 3:06-cv-03903	Objections Of Putative Class Members To Motion For Class Certification & Preliminary Approval Jaffe v. Morgan Stanley	Nov. 9, 2007	Nov. 9, 2007 Pleading / Motion / Brief 2007 WL 4919794
106 3:06-cv-03903	Defendant's Response To Objections Of Putative Class Members To Motion For Class Certification & Preliminary Approval Jaffe v. Morgan Stanley	Nov. 19, 2007	Nov. 19, 2007 Pleading / Motion / Brief 2007 WL 4919786
101 3:06-cv-03903	Reply Memorandum Of Plaintiff Curtis-Bauer In Support Of Motion For Preliminary Settlement Approval And Class Certification Jaffe v. Morgan Stanley	Nov. 19, 2007	Nov. 19, 2007 Pleading / Motion / Brief 2007 WL 4919785

ECF Number	Description	Date	Link Date / Link
1	CLASS ACTION COMPLAINT for Injunctive & Declaratory Relief & Damages for Violations of Title VII of the Civil Rigths Act of 1964 & The California Fair Employment & Housing Act & Demand for Jury Trial - [Summons Issued] against Morgan Stanley DW, Inc., [Filing Fee: $350.00, Receipt Number 3387018]. Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 6/22/2006) Additional attachment(s) added on 7/10/2006 (tn, COURT STAFF). (Entered: 06/23/2006)	June 22, 2006	June 22, 2006 PACER
2	ADR SCHEDULING ORDER: Case Management Statement due 9/19/2006 & Initial Case Management Conference set for 9/26/2006 at 10:00 A.M. (Attachments: #(1) Standing Order). (tn, COURT STAFF) (Filed on 6/22/2006) (Entered: 06/23/2006)	June 22, 2006	June 22, 2006 PACER
	SUMMONS Issued as to Defendant Morgan Stanley DW, Inc.. (tn, COURT STAFF)	June 22, 2006	June 22, 2006 PACER
	CASE DESIGNATED for Electronic Filing. (tn, COURT STAFF)	June 22, 2006	June 22, 2006 PACER
3	STIPULATION Extending Time for Defendant to Respond to Complaint by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 7/14/2006) (Entered: 07/14/2006)	July 14, 2006	July 14, 2006 PACER
4	APPLICATION of Attorney Elizabeth A. Alexander for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00 Receipt Number 3388365] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 7/31/2006) (Entered: 08/03/2006)	July 31, 2006	July 31, 2006 PACER
5	CERTIFICATE OF SERVICE Filed by Plaintiff Daisy Jaffe re 4 Application for Leave to Appear in Pro Hac Vice & [Proposed] Order. (tn, COURT STAFF) (Filed on 7/31/2006) (Entered: 08/03/2006)	July 31, 2006	July 31, 2006 PACER
	RECEIVED ORDER: [Proposed] Order Granting re 4 Application for Admission of Attorney Pro Hac Vice Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF)	July 31, 2006	July 31, 2006 PACER
7	ORDER GRANTING Application of Elizabeth Alexander for admission of attorney Pro Hac Vice 4 - Signed by Magistrate Judge Elizabeth D. Laporte. (lmh, COURT STAFF) (Filed on 8/1/2006) (Entered: 08/04/2006)	Aug. 1, 2006	Aug. 1, 2006 PACER
6	APPLICATION of Attorney Justin M. Swartz for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00 Receipt Number 3388583] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 8/3/2006) (Entered: 08/03/2006)	Aug. 3, 2006	Aug. 3, 2006 PACER
	RECEIVED ORDER: [Proposed] Order re 6 Application for Leave to Appear in Pro Hac Vice Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF)	Aug. 3, 2006	Aug. 3, 2006 PACER
10	CERTIFICATE OF SERVICE by Daisy Jaffe re 9 MOTION for leave to appear in Pro Hac Vice & [Proposed] Order. (tn, COURT STAFF) (Filed on 8/4/2006) (Entered: 08/07/2006)	Aug. 4, 2006	Aug. 4, 2006 PACER
8	ORDER GRANTING Application of Justin Swartz for admission of attorney Prop Hac Vice 6 - Signed by Magistrate Judge Elizabeth D. Laporte (lmh, COURT STAFF) (Filed on 8/4/2006) (Entered: 08/04/2006)	Aug. 4, 2006	Aug. 4, 2006 PACER
9	APPLICATION of Attorney Piper Hoffman for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00, Receipt No. 3388630] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 8/4/2006) (Entered: 08/07/2006)	Aug. 4, 2006	Aug. 4, 2006 PACER
	RECEIVED ORDER: [Proposed] Order Granting re 9 Application for Admission of Attorney Pro Hac Vice Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF)	Aug. 4, 2006	Aug. 4, 2006 PACER
11	ORDER GRANTING Application of Piper Hoffman for admission of attorney Pro Hac Vice 9 - Signed by Magistrate Judge Elizabeth D. Laporte. (lmh, COURT STAFF) (Filed on 8/8/2006) (Entered: 08/09/2006)	Aug. 8, 2006	Aug. 8, 2006 PACER
12	STIPULATION Extending Time for Defendant to Respond to Complaint by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 8/14/2006) (Entered: 08/14/2006)	Aug. 14, 2006	Aug. 14, 2006 PACER
13	CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 12 Stipulation (Yates, Gregg) (Filed on 8/14/2006) (Entered: 08/14/2006)	Aug. 14, 2006	Aug. 14, 2006 PACER
14	NOTICE of need for ADR Phone Conference (ADR L.R. 3-5 d) (Alexander, Elizabeth) (Filed on 9/5/2006) (Entered: 09/05/2006)	Sept. 5, 2006	Sept. 5, 2006 PACER
15	Declination to Proceed Before a U.S. Magistrate Judge by Morgan Stanley DW, Inc. and Request for Reassignment to a United States District Judge. (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)	Sept. 14, 2006	Sept. 14, 2006 PACER
16	CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 15 Declination to Proceed Before a U.S. Magistrate Judge (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)	Sept. 14, 2006	Sept. 14, 2006 PACER
17	CLERK'S NOTICE of Impending Reassignment to U.S. District Judge (lmh, COURT STAFF) (Filed on 9/14/2006) (Entered: 09/14/2006)	Sept. 14, 2006	Sept. 14, 2006 PACER
18	STIPULATION Extending Time for Defendant to Respond to Complaint by Morgan Stanley DW, Inc.. (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)	Sept. 14, 2006	Sept. 14, 2006 PACER
19	CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 18 Stipulation (Yates, Gregg) (Filed on 9/14/2006) (Entered: 09/14/2006)	Sept. 14, 2006	Sept. 14, 2006 PACER
20	ORDER REASSIGNING CASE. Case reassigned to Judge Thelton E. Henderson for all further proceedings. Judge Elizabeth D. Laporte no longer assigned to the case.. Signed by Executive Committee on 9/15/06. (as, COURT STAFF) (Filed on 9/15/2006) (Entered: 09/15/2006)	Sept. 15, 2006	Sept. 15, 2006 PACER
21	CLERK'S NOTICE: Initial Case Management Conference set for 10/2/2006 at 01:30 PM. (rbe, COURT STAFF) (Filed on 9/18/2006) (Entered: 09/18/2006)	Sept. 18, 2006	Sept. 18, 2006 PACER
22	STIPULATION RESETTING DATE OF CASE MANAGEMENT CONFERENCE AND [PROPOSED] ORDER THEREON by Morgan Stanley DW, Inc.. (Roger, Kent) (Filed on 9/20/2006) (Entered: 09/20/2006)	Sept. 20, 2006	Sept. 20, 2006 PACER
23	CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 22 Stipulation (Roger, Kent) (Filed on 9/20/2006) (Entered: 09/20/2006)	Sept. 20, 2006	Sept. 20, 2006 PACER
24	STIPULATION AND ORDER: Initial Case Management Conference rescheduled to 10/30/2006 at 01:30 PM. Signed by Judge Thelton E. Henderson on 09/21/06. (rbe, COURT STAFF) (Filed on 9/21/2006)	Sept. 21, 2006	Sept. 21, 2006 RECAP
25	AMENDED COMPLAINT, First Amended Class Action Complaint For Injunctive And Declaratory Relief And Damages, etc. against all defendants. Filed byDaisy Jaffe. (Attachments: # 1 Exhibit A# 2 Exhibit B)(Dermody, Kelly) (Filed on 10/12/2006) (Entered: 10/12/2006)	Oct. 12, 2006	Oct. 12, 2006 PACER
30	APPLICATION of Attorney Adam T. Klein for Leave to Appear in Pro Hac Vice [Filing Fee: $210.00, Receipt No. 3391350] Filed by Plaintiff Daisy Jaffe. (tn, COURT STAFF) (Filed on 10/17/2006) Additional attachment(s) added on 10/24/2006 (tn, COURT STAFF). (Entered: 10/18/2006)	Oct. 17, 2006	Oct. 17, 2006 PACER
	RECEIVED ORDER: [Proposed] Order Granting Application for Admission of Attorney Pro Hac Vice re 30 Submitted by Plaintiff Daisy Jaffe. (tn, COURT STAFF)	Oct. 17, 2006	Oct. 17, 2006 PACER
26	Ex Parte Application to Continue Case Management Conference filed by Morgan Stanley DW, Inc.. (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)	Oct. 18, 2006	Oct. 18, 2006 PACER
27	Declaration of Gregg P. Yates in Support of 26 Ex Parte Application to Continue Case Management Conference filed byMorgan Stanley DW, Inc.. (Attachments: # 1 Exhibit 1-3)(Related document(s) 26 ) (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)	Oct. 18, 2006	Oct. 18, 2006 PACER
28	Proposed Order re 26 Ex Parte Application to Continue Case Management Conference by Morgan Stanley DW, Inc.. (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)	Oct. 18, 2006	Oct. 18, 2006 PACER
29	CERTIFICATE OF SERVICE by Morgan Stanley DW, Inc. re 26 Ex Parte Application to Continue Case Management Conference (Eisen, Rebecca) (Filed on 10/18/2006) (Entered: 10/18/2006)	Oct. 18, 2006	Oct. 18, 2006 PACER
31	CERTIFICATE OF SERVICE by Daisy Jaffe of Notice of Judge Henderson's Standing Orders (Wong, Heather) (Filed on 10/18/2006) (Entered: 10/18/2006)	Oct. 18, 2006	Oct. 18, 2006 PACER
32	MEMORANDUM in Opposition TO EX PARTE APPLICATION TO CONTINUE CASE MANAGEMENT CONFERENCE filed byDaisy Jaffe. (Attachments: # 1 Affidavit OF KELLY M DERMODY IN SUPPORT OF PLAINTIFFS OPPOSITION TO EX PARTE APPLICATION TO CONTINUE CASE MANAGEMENT CONFERENCE)(Dermody, Kelly) (Filed on 10/18/2006) (Entered: 10/18/2006)	Oct. 18, 2006	Oct. 18, 2006 PACER
33	ORDER DENYING 26 Ex Parte Application to Continue Case Management Conference filed by Morgan Stanley DW, Inc. Signed by Judge Thelton E. Henderson on October 19, 2006. (tehlc1, COURT STAFF) (Filed on 10/19/2006)	Oct. 19, 2006	Oct. 19, 2006 RECAP
34	NOTICE of need for ADR Phone Conference (ADR L.R. 3-5 d) (Alexander, Elizabeth) (Filed on 10/20/2006) (Entered: 10/20/2006)	Oct. 20, 2006	Oct. 20, 2006 PACER

Case: Jaffe v. Morgan Stanley DW, Inc.

3:06-cv-03903 | U.S. District Court for the Northern District of California

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