A former executive with Morgan Stanley is suing the company for discrimination, alleging he was let go and replaced with a Black woman with “significantly less experience and qualifications” as the part of the financial giant’s efforts to meet its diversity, equity and inclusion goals.
Filed Tuesday in federal court in the Southern District of New York, the lawsuit alleges that Kevin Meyersburg was unfairly terminated this spring from his role as managing director and head of executive services after three years with Morgan Stanley, despite “an impressive list of achievements.” According to the lawsuit, the executive who relayed the news to Meyersburg that he was being terminated expressed “concern” about the experience level of his replacement and “could not explain to Meyersburg why the decision had been made.”
As a leader, Meyersburg was “an active supporter” of Morgan Stanley’s DEI efforts, according to the lawsuit. He had helped to run a program on inclusive leadership and was in the process of orchestrating another when he learned of his termination. But when Meyersburg expressed confusion about his firing on a call with another executive, he was told “that it was because of [diversity and inclusion] initiatives,” the complaint states.
“This is an example of DEI run amok,” Meyersburg’s attorney, Louis Pechman, told The Washington Post. “Race cannot be a factor in employment decisions, period. Full stop.”
Morgan Stanley declined to comment on the lawsuit.
The case is the latest in a flurry of legal actions targeting corporate diversity, equity and inclusion practices in the wake of the Supreme Court decision in June striking down affirmative action in college admissions. Experts have been anticipating a rise in cases such as Meyersburg’s, which allege reverse discrimination, as some litigants are eager to translate the court’s race-blind stance to the workplace.
Even before the recent ruling on affirmative action, reverse-discrimination claims appeared to be on the upswing amid “increasing internal concerns around DEI,” said Krissy Katzenstein, an employment lawyer with Baker McKenzie.
“I think there’s going to be a high degree of scrutiny around programming focused on workforce representation,” Katzenstein said.
Last week, the American Alliance for Equal Rights, a nonprofit founded by conservative activist Edward Blum, sued two prominent corporate law firms — Perkins Coie and Morrison & Foerster — alleging their fellowship programs for law students of diverse backgrounds are racially discriminatory. Blum was also behind the lawsuits that saw the Supreme Court strike down affirmative action in college admissions.
Earlier in August, five former Gannett employees filed a proposed class-action lawsuit accusing the media company of “reverse race discrimination.” The suit claims White workers were unfairly terminated or passed over for opportunities and replaced with less-qualified minority candidates in the interest of meeting Gannett’s goal of having a workforce that better reflects the demographics of communities they cover. The suit cited a passage from the recent Supreme Court ruling arguing that to eliminate racial discrimination in admissions decisions, colleges and universities should stop considering race at all.
“Given that the Supreme Court has endorsed the concept of reverse-discrimination, buckle up,” Pechman said. “The floodgates for these cases are now wide-open.”
The wave of legal action is coming at a critical moment for corporate DEI efforts. In the wake of George Floyd’s murder in 2020, companies made $340 billion in commitments to improve racial equity in their ranks between May 2020 and October 2022, according to data from the McKinsey Institute for Black Economic Mobility. But companies have been backpedaling in the past year amid recession fears, with big firms paring back DEI roles.
David Glasgow, executive director of the Meltzer Center for Diversity, Inclusion, and Belonging at New York University, said he’s been surprised that corporate diversity efforts haven’t been more of a legal target until this point. The affirmative action ruling “is going to embolden a lot of people,” Glasgow said.
Private employers are broadly barred from making employment decisions based on race under the Civil Rights Act of 1964. The legislation does not distinguish between standards for minority or majority groups, so the threshold for proving discrimination is the same regardless of the plaintiff’s race, according to Glasgow.
“All they need to show is that the employer took some adverse employment action against them” on the basis of race, Glasgow said.
In the past, the bar for adverse employment actions was fairly high: Plaintiffs had to show that they suffered an “ultimate employment decision” such as being fired, suspended or not being promoted. But a ruling last week by the Fifth U.S. Circuit Court of Appeals broadened the range of employer actions that courts could consider as the basis for a discrimination claim.
While Meyersburg’s lawsuit claims Morgan Stanley is prioritizing diversity at the expense of White employees, the investment bank has also faced litigation alleging the opposite. A 2020 lawsuit from the firm’s first chief diversity officer accused the bank of silencing and retaliating against workers who sought to make the investment bank more inclusive. In 2016, seven Black financial advisers sued Morgan Stanley, alleging that they were less likely than White peers to be assigned to high-producing teams, making it harder for them to earn equal pay and remain at the firm.
And in May, a former Black recruiting consultant represented by civil rights attorney Ben Crump filed a lawsuit accusing the company of racial discrimination. The recruiter said that he was restricted to sourcing “diverse” candidates and that Morgan Stanley hired only 16 of the 200 highly qualified candidates he identified over seven years.
“The pattern is clear that Morgan Stanley has deep and wide institutional bias against Black people,” Crump said in a news release. “We have amassed compelling evidence that Morgan Stanley is reluctant to hire Black employees; it doesn’t believe people want Black financial advisers, and it doesn’t think Black people have money to invest.”
Source: washingtonpost.com
