Morgan Stanley’s Employee Arbitration and Class Action Waiver Policies Questioned

Should employees be forced to give up their right to litigate their discrimination claim in court and as part of a class?

A discrimination claim has been filed against Morgan Stanley. While these types of claims are numerous, an allegation within the complaint is noteworthy. The plaintiff claims that Morgan Stanley is using forced arbitration and a waiver of the right to form a class action to protect itself from suits brought by employees.

Morgan Stanley’s policy is that employees who have workplace claims against the company will not be permitted to bring those claims in court, and also will not be allowed to collaborate as part of a class. The argument against this policy is that it eliminates two important options for a prospective plaintiff who is considering a claim against Morgan Stanley. A Morgan Stanley representative defended the company by stating that the new policy does not disadvantage employees.

This policy is actually an agreement between the employee and the company, Morgan Stanley. Lawyers know these agreements as “negative consent” agreements. Here, Morgan Stanley gave employees 30 days during which they could reply that they did not consent to the policy. If the 30 days passed without a response, then Morgan Stanley would presume that the employee consented.

Certain claims are not included in the policy, such as unemployment benefits, workers’ compensation benefits, and claims under the National Labor Relations Act.

It is important to recognize that your attorney will always consider every available option when it comes to resolving a claim. There are advantages and disadvantages to negotiating, mediating, litigating, or arbitrating a claim on your behalf. Arbitration can be beneficial for both parties in that it allows for a fast and private settlement. Litigation, however, is an important option for plaintiffs who desire a public forum and the ability to appeal the court’s decision.

If you are an employee who receives notice of this type of policy from your employer, or you are an employer who is considering implementing this type of policy, contact Thomas M. Lancia PLLC to speak to an experienced attorney before you act. Serving the greater New York City metropolitan area, we can be reached at: 212-964-3157.