Morgan Stanley plans to ask a federal court to toss its former diversity head’s race bias claims against it, but the plaintiff and her lawyer argue that the case should proceed.

A letter sent last week by Morgan Stanley’s lawyer to a judge overseeing the litigation states the wirehouse’s plans to ask for the dismissal. Specifically, Morgan Stanley wants the court to dismiss Marilyn Booker’s claims of race discrimination, equal pay, retaliation, and hostile work environment.

According to the October 26 letter from Morgan Stanley's lawyer, Booker’s allegations included only "bald assertions” for discrimination claims, “threadbare, boiler-plate recitations” for equal pay claims, “a trivial inconvenience or a petty slight” for hostile work environment claims, and “no facts” to establish a link for retaliation claims.

But Booker’s lawyer argues in a November 2 letter to the same judge that Morgan Stanley is seeking to have the court “evaluate the truth as to what really happened” prior to “any discovery” taking place. Booker has identified “ample facts” at “this stage” of the lawsuit, which seeks collective action status, her lawyer argues.

The court has scheduled a conference for November 12 to discuss Morgan Stanley’s proposed motion to dismiss.

Booker filed her federal lawsuit in June. She had been with Morgan Stanley for 26 years when she was “abruptly terminated” earlier this year, she alleged. Booker was the firm’s global head of diversity from 1994 to 2010, according to her biography.

Morgan Stanley “actively sought to silence those who speak out and try to advocate for change when it comes to diversity and inclusion,” her lawsuit alleges.

Booker’s lawsuit also named as defendants James Gorman, Morgan Stanley's CEO, and Barry Krouk, identified in the lawsuit as managing director, chief administrative officer of field management at Morgan Stanley, within its wealth management division.

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In the October 26 letter, Morgan Stanley’s lawyer also proposes that the court toss the claims against Gorman and Krouk. Booker’s discrimination claims against the two executives are “derivative” of her “deficient discrimination and retaliation claims,” the lawyer argues. Her one allegation against Gorman is 10 years old, the lawyer adds.

The November 2 letter from Booker’s lawyer provided the following specific allegations to support her claims:

  • Morgan Stanley rejected all but one of "the high number of qualified minority candidates for the FA training program" recommended by Booker.
  • After becoming CEO in 2010, Gorman moved Booker from the diversity role to the then newly-created Urban Markets Group and “blocked” her efforts to “fully succeed” in the group by assigning her eight managers — all white, seven male — in eight years, capping her team size to two FAs, and slashing her budget by 71% over eight years.
  • Morgan Stanley kept Booker’s salary flat for eight years, paying her less than similarly situated and mainly white males.
  • Despite Booker lodging a complaint with Krouk in June 2019 about “unequal treatment and systemic discrimination faced by minority FAs and FA trainees,” she was terminated before a project she initiated to correct those biases could get underway.

Booker's lawyer did not return a call for this story.

A Morgan Stanley spokesperson says the wirehouse declines to comment further on this lawsuit. But the spokesperson resent a statement that was previously provided in June, stating the wirehouse “strongly” rejects the allegations and is committed to improving the diversity of its employees.

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