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EEOC v. Morgan Stanley. U.S. District Court, SDNY(2004) Judge Ellis. Background. 9/2001: EEOC sued Morgan Stanley (MS) for employment discrimination in violation of Title 7 of the Civil Rights Act of 1964.

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Eeoc v morgan stanley

EEOCv. Morgan Stanley

U.S. District Court, SDNY(2004)

Judge Ellis


  • 9/2001: EEOC sued Morgan Stanley (MS) for employment discrimination in violation of Title 7 of the Civil Rights Act of 1964.

  • Alleged discrimination against Allison Schieffelin and close to 100 others in the Institutional Equity Division (IED). Also said, when Shieffelin complained, MS retailed by firing her.

  • ISSUE: Did MS pay and promote similarly situated male employees at higher rates?


  • Case ended up settling right before opening statements.

  • DETAILED consent decree

    • MS maintained it didn’t violate Title 7

    • Names kept confidential

    • Stipulated to everything: attorneys’ fees, policies, etc.

  • MS settled for $54 million

    • $12 mil for Allison

    • $2 mil spent by MS for diversity initiatives

    • $40 mil to be distributed amongst class of 67 women

Fre 702 brush up

Gate-keeping function of court.

Admits only reliable and relevant evidence

Daubert factors

Any expert knowledge, not just scientific

Focus on methods, not conclusion

Rejection is the exception, not the rule

FRE 702 Brush up

Fre 702 motions
FRE 702 Motions

  • Motions from three parties (Allison, MS, and EEOC)

  • Three types of evidence: Statistics, Social Science, & Miscellaneous (i.e. damages)

  • Court separated by evidence type and then analyzed each expert

Statistical experts farrell bloch eeoc

EEOC says:

Found disparities in pay/promotion by analyzing MS personnel database

Experience & education are good proxies for performance & productivity

Missing variables aren’t quantifiable

Morgan Stanley says:

Didn’t control for “non-discriminatory factors”

Included foreigners

Grouped together employees performing different job functions

Improper pooling of pay/promotion decision-makers

Statistical Experts: Farrell Bloch (EEOC)

Judge says in
Judge says: In

  • Jury can analyze how probative, whether Bloch’s objective variables are reasonable substitutes

  • Raise criticisms on cross-examination

  • No comprehensive, common database of personnel decisions

  • The variables identified by Wecker are subjective, so no quantification is possible.

Wecker ms to counter bloch

Morgan Stanley says:

Bloch made wrong inference (disparity due to gender) from data

Failed to consider job function & performance

Failed to find meaningful substitute measures

EEOC says:

He didn’t do own full analysis—easier to poke holes

Used two small sample groups within IED. No weight because size too small and info given during interview with MS managing director.

Wecker (MS)to counter Bloch

Wilde ms to counter bloch

Morgan Stanley says:

Shows Bloch’s statistical methods to estimate damages were unreliable & irrelevant

Analyzes Bloch’s data to say women were paid equal to or more than men

EEOC says:

He didn’t do his own empirical studies

Criticisms are merely speculatory

Improper opinion on legal issue

Wilde (MS)to counter Bloch

Judge says in1
Judge says: In

  • Wecker and Wilde’s analysis of insufficiencies are significant, own statistical analysis is not necessary

  • EEOC’s issues impact probative weight, not admissibility

  • Not legal conclusions

Social science experts william bielby eeoc


Ph.D. in Sociology

President of American Sociological Association, 2002-03

Prof at U Penn

Prior Cases:

Betty Dukes v. Walmart

Cremin v. Merrill Lynch

Martens v. Smith Barney (’00 & ’03)

Social Science Experts: William Bielby (EEOC)

Bielby s testimony

Explains “factors that create and minimize workplace gender bias, including how gender stereotypes affect personnel decisions, organizational policies & practices that create barriers to career advancement of women, and the kind of policies and procedures that effectively minimize gender bias, particularly in male-dominated work environments.”

Summarizes social science research

Applies to this case through “social framework analysis”

Finds male-dominated environment at IED, policies that don’t detect & minimize gender discrimination, & arbitrary/subjective procedures for pay/promotion

Bielby’s Testimony:

Morgan stanley s objections

Lacks first-hand knowledge b/c testimony based on depositions

No background in social psychology, human resources, or personnel policies

No studies of IED

Unreliable methodology

No science

Omits inconsistent literature

“Social framework analysis” isn’t accepted

Male-dominated culture is irrelevant b/c can’t prove intentional discrimination

Misapplies burden of proof by saying that gender discrimination is inevitable in IED without appropriate safeguards (which aren’t there)

Morgan Stanley’s Objections

Judge says yes no
Judge Says: Yes & No depositions

  • Acceptable methodology

  • Critiques go towards weight

  • Can say testify to gender stereotypes, how they may have affected decisions at MS, and whether policies/practices relating to gender bias might affect employees’ utilization of an equal opportunity program

  • Can’t say male-dominated environment

    • Too theoretical to say male-dominated environment results in discrimination

    • Jury would expect discrimination think MS would have to prove otherwise

Ms experts to counter bielby

Barbara Gutek (accepted): depositions

Bielby’s opinions are unscientific

No consensus in social science research regarding best policies/practices to handle discrimination

Inappropriately relies on her work

Ira T. Kay (denied):

Compensation consultant with Ph.D. in Labor Economics

Tries to challenge Bielby’s “arbitrary” designation

Doesn’t use the qualitative factors

Says that pay/promotion system is the same in MS as in other wall street firms and why they adopt such policies

MS Experts to Counter Bielby

More ms social science experts

June O’Neill depositions(Accepted & Denied):

Not all pay discrepancies between men & women = gender discrimination

Presents study regarding compensation based on IED in North America showing no statistically significant differences in HIRING based on gender

Ct says hiring part is irrelevant, but choice testimony if fine

Christopher Winship (Accepted & Denied):

“Social Science methodologist”

Bielby’s invalid scientific methodology

Use of social science literature

Flaws in analysis of IED and Schieffelin

Court says he is qualified but has to leave out his conclusions about pay/promotion procedures b/c not a human resource specialist

MORE MS Social Science Experts

Major problem with bielby the causal story
Major Problem with Bielby: the Causal Story depositions

  • How can he prove discrimination?

    • Difficulty in finding link between environment and the actual decisions being made

      • Difficulty of getting into someone’s head

    • How to remove other factors (i.e. not promoting b/c afraid of mommy track, male clients don’t trust women)

      • Which factors to remove? mommy track reasonable?

    • Subjective nature of evaluation—hard to quantify things like leadership, teamwork, management ability, integrity, product knowledge, & contribution to profitability

The big picture
The Big Picture depositions

  • Gender discrimination exists whether a study can prove it or not

  • Justice requires that the legal system right this wrong

    • Not doing so perpetuates discrimination

  • How can we prove this discrimination type?

  • Don’t want to get rid of causal link

  • Some alternatives:

    • Potential outcome analysis v. regression

    • A control—perhaps businesses outside industry known for being progressive model, i.e. Costco.

      • But how comparable? Same issues facing management in different industry?