October 3, 2018 / 9:22 PM / 18 days ago

Race bias lawsuit against Morgan Stanley sent to private arbitration

Oct 3 (Reuters) - A black former Morgan Stanley broker who filed a lawsuit accusing the bank of racial bias must pursue his claims in private arbitration, a New York federal judge ruled Wednesday.

U.S. District Judge John Koeltl in Manhattan ruled that the former broker, John Lockette, was bound by a company policy requiring employees to arbitrate all claims, including discrimination claims.

Linda Friedman, a lawyer for Lockette, could not immediately be reached for comment. Morgan Stanley also did not responded to a request for comment.

Lockette, who was hired by Morgan Stanley as an assistant vice president in wealth management in 2013, sued the company in February.

The New Jersey resident said he was given negative performance reviews, denied raises and bonuses, deemed too "verbose," and subjected by a supervisor to the nickname "Johnny" because of his race.

Lockette also said one supervisor insisted that he join a special program to prepare for the Series 7 broker examination because blacks' "intellectual weakness" left them "inherently less capable" of passing, the complaint said.

He said the discrimination culminated in his firing in August 2016. He sought compensatory and punitive damages, back pay, and an injunction against further discrimination.

Morgan Stanley filed a motion seeking to send the case to private arbitration, pointing to a May 20, 2015 email in which Morgan Stanley employees were told they must arbitrate all claims.

Lockette said he never got the email, and so never agreed to arbitration, but Koeltl ruled that his "mere denial of receipt" was not enough to escape the policy under New York law.

The case is Lockette v Morgan Stanley et al, U.S. District Court, Southern District of New York, No. 18-00876. (Reporting By Brendan Pierson in New York)

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