Morgan Stanley and financial advisers, who alleged the investment bank to have breached California wage laws, have reignited plans to solve their over $10 million dispute after it received fresh attention from a federal district judge subsequent to an appeal. The initial agreement was set aside last year following an appeal in the Ninth Circuit.
The lawsuit was sparked by advisor Brandon Harvey, who claimed Morgan Stanley offered compensation for particular business expenses, only to then deduct advisor commissions to cover staff remuneration and other costs. Morgan Stanley firmly denies any liability in settling the dispute.
A previous approval for appeasement in 2020 was unsurprisingly met with criticism from a class member who decided to intervene in the case. This resulted in a series of legal actions culminating in the intervention prompting the US Court of Appeals for the Ninth Circuit in 2022 to return the settlement for further scrutiny, specifically to evaluate whether the whole class had suffered injury thus qualifying them for recovery from this settlement.
Judge William H. Orrick of the US District Court for the Northern District of California had to reconsider his prior approval motion. Consequently, a new order came into force on October 6, according to which Orrick reaffirmed his findings on the “propriety of certifying the settlement class”, covering approximately 3,000 people. This newly settled group includes a certain number of overlapping but distinct class of aggrieved employees according to the Private Attorneys General Act of California.
The previous order awarded the counsel of the class nearly $2.4 million in attorney fees. The recent ruling by Orrick additionally allocates close to $1.2 million for attorney fees following the appeal, and instructs the settlement administrator to withhold 20% of the fee award until the attorneys file a post-distribution accounting.
The legal representatives in this case include Wynne Law Firm, and Clapp & Lauinger LLP for the class, with Outten & Golden LLP, Polk Kabat LLP, and Laura Sullivan, based in Orange, California, representing the intervening party. Morgan Stanley was legally represented by Orrick, Herrington & Sutcliffe LLP.
For more details, kindly refer to the original case, Harvey v. Morgan Stanley Smith Barney LLC.
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