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Friday morning docket: the Supremes are back

The justices of the Supreme Court head back to work today, where they are scheduled to conference for the first time this month. They could grant some petitions for certiorari or issue other orders today, and this blog will be updated with news on that front.

Next week, after the President’s Day holiday Monday, oral arguments resume, and two cases on the court’s docket involve employment retaliation claims. (As always, links go to the case summaries by the Oyez Project).

Tuesday, the Court will consider whether a federal employee, who has complained of age discrimination and was later fired, can bring a retaliation claim against her employer under the Age Discrimination in Employment Act in Gomez-Perez v. Potter, No. 06-1321. In Wednesday’s oral argument in CBOCS West, Inc. v. Humphries, No. 06-1431, the justices will consider whether an employee, fired after complaining that his supervisor used racial slurs, can bring a retaliation claim under 42 U.S.C. §1981 (the Civil Rights Act of 1866).

Tuesday, The Court will also consider whether the government can allow utility companies to renegotiate long-term contracts with wholesale energy suppliers in Morgan Stanley Capital Group v. Public Utility District No. 1, No. 06-1457, consolidated with Calpine Energy Services v. Public Utility District No. 1, No. 06-1462.


Lawmakers in the House don’t like the wiretap bill. (WaPo)

Lawmakers in the Senate don’t like waterboarding. (NYT).

Unhappy with the FDA’s performance, Michigan Democrat Rep. Bart Stupak called for agency Commissioner Andrew von Eschenbach’s resignation. (AP)

One lawmaker is pushing to give banks immunity from patent infringement lawsuits. (WaPo).

Rep. Tom Lantos is remembered. (SF Chronicle)

One comment

  1. It just never ends at Morgan Stanley


    Regulators Examine Morgan Stanley Cuts
    Tuesday November 27, 3:17 pm ET
    Age-Bias Probe Investigates Morgan Stanley Layoffs, Seniority-Based Production Requirements
    NEW YORK (AP) — Morgan Stanley, like several other brokerage firms, expects experienced financial advisers to generate more business than less experienced ones. Now regulators want to know if the firm discriminated against older brokers who didn’t meet that higher standard.
    In a letter dated Nov. 6 obtained by Dow Jones Newswires and sent to hundreds of former Morgan Stanley brokers, the U.S. Equal Employment Opportunity Commission said it is conducting an investigation into large-scale layoffs by the New York-based firm in August 2005.

    A spokeswoman at the EEOC said the commission doesn’t confirm or deny whether a company is under investigation.

    At the time, Morgan Stanley laid off around 1,000 brokers who failed to meet new production hurdles. As brokers gained seniority, they had to generate higher commissions and fees to remain employed.

    The practice is common at brokerage firms. A number of them, including Morgan Stanley and Citigroup Inc. unit Smith Barney, ratchet up demands on experienced brokers. For a given production level, newer brokers retain a higher percentage than more experienced brokers of the commissions and fees they generate, particularly those in the low or middle ranges of production.

    In Morgan Stanley’s case, the firm went so far as to lay off experienced brokers who didn’t generate a high enough production.

    The EEOC probe isn’t the only potential challenge to Morgan Stanley over age discrimination. A federal lawsuit filed by Edward Sullivan, former regional director at the firm’s wealth management unit, is pending before the U.S. District Court of the Southern District of New York. Sullivan, a 25-year Morgan veteran in his mid-50s at the time, alleged that he was fired in May 2006 because of his age.

    Some lawyers at brokerage firms and consultants say an adverse finding by the EEOC on the Morgan Stanley layoffs could force a rethinking of pay structures linked to years of service.

    Lawyers at brokerage firms say it makes sense to require more production from more experienced advisers. “It has nothing to do with age, it has to do with the number of years of production,” said a lawyer at a Morgan Stanley competitor. Still, with an adverse EEOC finding, depending on specifics, “you’d have to change the pay structure,” the lawyer said.

    Garry Stegeland, general counsel and chief compliance officer for Ryan Beck, which has been acquired by Stifel Financial Corp., said requiring more of experienced brokers is “appropriate,” but “it’s a dangerous course of conduct if you use it as your only” criterion in dismissals.

    “If it winds up with a disproportionate number of ‘protected class’ people being terminated, it is an issue,” he said. Employment of people in protected classes is shielded by law to reverse the effects of past discrimination.

    To ward off potential lawsuits, said Robert Salwen, a compensation consultant, firms could implement a pay structure based purely on production. Pegging part of compensation on length of service may discourage veteran brokers from resting on their laurels, but “if that’s the case, then there may be an age component.”

    Growing demands on aging brokers will become an issue because, say consultants, the age of the average broker is rising. “It’s an aging industry and it’s becoming a bigger problem,” said Philip Palaveev, a senior consultant on financial advisory at Moss Adams.

    Hard data on brokers’ demographics at major brokerages are hard to come by. Among independent advisers, a recent survey conducted by Moss Adams found the median age of practice owners is 49 this year, up slightly from 48 in 2004.

    When Morgan Stanley conducted its layoffs in 2005, it fired brokers with more than eight years’ experience who produced $225,000 or less annually in fees and commissions. Those with five to eight years’ experience were axed if they failed to produce $150,000, while those who had been in the industry for one to four years lost their jobs if they failed to produce at least $100,000.

    Jim Wiggins, a Morgan Stanley spokesman, said the brokers were terminated on the basis of performance, not age.

    Robert Larocca, who represents the brokers who filed the age discrimination complaint at the EEOC in Philadelphia, declined to comment.

    If the EEOC probe concludes the brokers’ complaint has merit, the commission can pursue the case before a federal court on the plaintiffs’ behalf, or simply advise the plaintiffs to pursue a court case on their own. If the investigation proves favorable to Morgan Stanley, the plaintiffs will have a hard time pursuing a federal lawsuit unless the court overturns EEOC’s decision.

    Jaime Levy Pessin contributed to this report.
    A Class Action lawsuit against Morgan Stanley is in the works. Charges of Age Discrimination have been flied with the EEOC on behalf of those fired in August 2005. Contact Hadley Perkins Roeltgen at Kohn, Swift & Graf,PC for more information. 215-238-1700 If you were fired or know other brokers that were fired contact Hadley at:

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