Exbroker's Lawsuit Against Morgan Stanley Highlights Surge In Complaints Over Mental Health Issues

A former disability ombudsman's lawsuit against his former employer, Morgan Stanley, shows a growing trend of complaints about how companies are managing employee mental health issues in the post-Covid era.

The anonymous broker, who said he was a star employee of the company's sports and entertainment division, sued the Wall Street bank in a state court in California on March 3, alleging the report was discriminatory. Brian Kruger, a former brokerage executive at one of the Los Angeles area offices, was named as the defendant.

The anonymous tipster, who joined the bank from Wells Fargo in June 2015, said she faced "penalties," "humiliation," and "retaliation" after she applied for an apartment and took a leave of absence due to mental illness. He reported a diagnosis of aerophobia, or fear of flying, as well as generalized anxiety disorder and post-traumatic stress disorder; Aerophobia predates the pandemic, and the other two disorders appear to predate 2020. Morgan Stanley fired the consultant in March. 9, 2021

The nature of the John Doe case is unclear. But its filing is a possible signal for lawsuits that asset management firms and other industries could face as the pandemic subsides and the impact of disruptions takes hold.

"This is really going to be one of the first times we look at anxiety disorders as we begin to emerge from COVID," said Bill Singer, securities litigation attorney and author of the Broke and Broker blog . he says in an interview.

Requested for comment on the matter, a Morgan Stanley spokesman said: "This former employee was fired in March 2021 and has since been banned from working in the securities industry by the Financial Industry Regulatory Authority. His allegations are completely unfounded.” The spokesman declined to comment. Brian Krueger, plaintiff's former manager and current attorney for Morgan Stanley in Woodland Hills, California, also declined to comment.

The agent said in the complaint that the client sued him before he was fired, but did not elaborate on the outcome of the case. AdvisorHub reported that the anonymous broker appears to be Daryl Matthew Cohen who was banned from the securities industry on December 30, 2021 and has 11 BrokerCheck results including one he did with a client of 2 for $5 million dollars paid. Brandon Reif, an attorney for the anonymous broker in Los Angeles, declined to corroborate the report.

"I'm not sure I'll buy it"
The lawsuit will be viewed through the lens of the Federal Americans with Disabilities Act , a 1990 statute that requires employers to provide "reasonable accommodation" to workers with disabilities. In the wake of COVID-19, Americans have seen an increase in burnout and mental health problems .

ADA requires companies with 15 or more employees to provide "reasonable accommodations" to employees with disabilities who so request, including mental health issues, as long as the accommodations do not cause "unreasonable hardship" such as a disability. B. high financial costs for the employer. . . .

The agent claimed Morgan Stanley fired him for "wrong reasons and pretenses" while he was on furlough due to intellectual disability.

This may or may not be true. However, "what this case is looking at isn't so much the facts of the case because, to be honest, I'm not sure I accept some of them," Singer said.

Rather, he added, that's what the case might represent for other mental health complaints in the workplace.

"Blinded by the Light"
During the pandemic, many financial advisors have discovered they can do their jobs remotely. Clients who previously required face-to-face meetings with their advisor have agreed to meet virtually. "So if the client isn't coming to see you, why are you bringing me to the office?" asked the singer.

Big companies including Goldman Sachs, Morgan Stanley and JPMorgan Chase say : upon full or near full resumption of work.

“Companies don't ask employees to come back, they ask them to come back. And that request in itself would be considered stress," Singer said. ' said the singer.

Not all requests for accommodation are legitimate. "There will be real reasons and wrong reasons," Singer said. "There will be employees who use fear as an excuse to get fired from their employer or threaten to go to the EEOC."

This can be a particular problem for the brokerage industry.

“Under FINRA rules, if you are seeking a legal remedy, such as illegal conduct (lawful sexual harassment, racial profiling, ADA), you cannot be compelled to go to arbitration, so this case is in court. It's a very intelligent and interesting situation."

Tyrone Blackburn, an attorney at TA Blackburn Law in New York who has filed several complaints against Morgan Stanley on behalf of former employees, including one alleging discrimination based on disability, agreed that the pandemic has changed things. "I think COVID has affected what people can tolerate," he said.

Ashley Nixon, a professor of human resources and organizational behavior at Willamette University's Atkinson School of Management, said last year that 43% of employers reported an increase in requests for reasonable mental health accommodation for people with disabilities.

Nixon cited a 2022 nationwide survey of employers conducted by employment and labor law firm Fisher Phillips.

"Many Judgments Coming"
With no merit, the anonymous brokerage case could be a sign of things to come, Blackburn says.

“I think there will be a lot of lawsuits. It's just my prediction that once mask mandates are lifted and staff are asked to return to the office, you'll be seeing a lot. ADA claims will come out.” – some are legitimate, some are not.

While Blackburn was also skeptical of John Doe's argument in his case against Morgan Stanley, he said some of the allegations fit a familiar pattern among Wall Street banks.

“Morgan Stanley has a system where if they have an employee who they see as a problem, someone who raises a concern, speaks up, says something, [Morgan Stanley] gives their customers strict enforcement action or produces work. And as a result it causes stress, anxiety, depression, everything."

Reif, the agent's unnamed attorney, said in the letter his client was a "disabled employee" who was "forced to surrender his personal phone, pushed back from an approved permit, held accountable for the client's complaint, and fired unharmed." became". ".

business meeting
Court documents show that Morgan Stanley initially offered John Doe a settlement.

Sharon Ash, senior litigator at the Hamburger law firm, said it may indicate the company accepts some legitimacy in its disability claims.

"I suspect it's not a pure case, or it might be enough here that Morgan Stanley tried to solve it. There was a deal on the table,” Ash said.

Regardless of how the case turns out, he added, employers can learn valuable lessons.

One is to review your manager training programs and ensure that the financial advisors directly in charge understand how to treat employees in accordance with the law.

said Ash. "Politics is useless if only the people at the top know about it."