Opinion
No. 01 Civ. 8421 (RMB) (RLE)
September 13, 2002
MEMORANDUM OPINION AND ORDER
I. INTRODUCTION
On September 6, 2002, plaintiff Equal Employment Opportunity Commission ("EEOC"), plaintiff-intervenor Allison Schieffelin, and defendants Morgan Stanley Co., Inc., and Morgan Stanley Dean Witter Co. (collectively "Morgan Stanley") appeared before this Court for a pretrial conference. The parties raised and briefed several issues upon which the Court ruled. This order sets forth the Court's oral rulings regarding allegations that Morgan Stanley has placed improper restrictions on communications between its current or former employees and the EEOC.
II. ANALYSIS
This Court has ordered Morgan Stanley to disclose to plaintiffs all release agreements signed by employees in settlement of gender discrimination claims. One release that has been produced to the EEOC contains a clause that EEOC asserts is an impediment to its investigation of discrimination claims. The clause at issue requires the employee to agree to the following:
[Y]ou will not offer assistance or testimony in any action against [Morgan Stanley] . . . unless ordered to do so by a court, agency or regulatory authority, and then only after you have given Carol Bernheim, Principal, Morgan Stanley . . . written notice within two (2) business days upon your receipt of any such subpoena, court order, or agency or regulatory request or order to do so such that [Morgan Stanley] may take whatever action it may deem necessary or appropriate to prevent such assistance or testimony and within two (2) business days provide to Carol Bernheim, Principal, Morgan Stanley . . . a copy of all legal papers and documents served upon you. You agree that in the event you are served with such subpoena, court order, directive or other process, you will meet with Ms. Bernheim or her designee in advance of giving such testimony or information.
Letter of EEOC to the Court Ex. D (August 6, 2002).
EEOC argues that defendants should be prohibited from enforcing the "non-assistance" portions of all release agreements because they discourage potential claimants from communicating freely with the plaintiff. To the extent that these agreements can be interpreted to prevent potential claimants from talking to the EEOC about this action, this Court agrees and adopts the position of the First Circuit on this issue. See EEOC v. Astra, Inc., 94 F.3d 738 (1st Cir. 1996). In Astra, a similar settlement agreement clause was held to violate public policy because it discouraged former employees from assisting the EEOC in investigating sexual harassment charges. The Court noted that "the significant public interest in encouraging communication with the EEOC" outweighs the interest in encouraging voluntary settlement agreements.Id. at 744.
Under Title VII, the EEOC is empowered to investigate and prevent unlawful employment discrimination. 42 U.S.C. § 2000e-5. "[I]t is crucial that the Commission's ability to investigate charges of systematic discrimination not be impaired." EEOC v. Shell Oil Co., 466 U.S. 54, 69 (1984). The EEOC is charged with investigating pattern and practice claims and, in order to do so, needs access to relevant employees.
Morgan Stanley concedes that the clause "does oblige [the employee] to require a subpoena before giving testimony in an action against Morgan Stanley," but argues that the requirements that she notify and meet with Morgan Stanley "do not improperly interfere with the EEOC's development of its case." Letter of Morgan Stanley to the Court 7-8 (August 9, 2002). However, in the Court's view, the language of the clause can be interpreted as forbidding potential claimants from cooperating freely with EEOC's investigation. The agreement clearly could have a chilling impact on claimants, and the Court therefore finds that a non-assistance clause directed at the EEOC violates public policy.
In addition to challenging the release agreements, EEOC argues that Morgan Stanley's 2001 Code of Conduct ("Code") impermissibly restricts the speech of its employees. The Code requires of employees the following:
You must notify your direct supervisor and Law or Compliance immediately in the event that you . . . become involved in any civil litigation or arbitration (excluding . . . matters that do not concern the Firm); receive a subpoena, inquiry or request from a governmental, regulatory or administrative agency or a claimant, plaintiff or outside attorney that involves, or has the potential for involving, the Firm . . . You must not take any action concerning the above matters without first contacting Law or Compliance. Failure to do so may lead to disciplinary action, up to and including termination of your employment . . . Do not initiate any contacts with a governmental or regulatory body or attorney regarding [subpoenas, investigations, inquiries and requests] without coordinating with Law or Compliance.
Code of Conduct 2001, Securities and Asset Management Businesses of Morgan Stanley Dean Witter 16-17, contained in Letter of EEOC to the Court Ex. A (August 13, 2002).
EEOC argues that according to this Code, if employees talk with the EEOC about gender discrimination claims at Morgan Stanley, they could be disciplined or terminated. As with the non-assistance agreements, this Court finds that this section of Morgan Stanley's Code violates public policy because it chills employee communications with the EEOC.
In light of the foregoing, IT IS HEREBY ORDERED THAT
(1) employees of Morgan Stanley, former or current, who have signed releases may communicate freely with the EEOC regarding gender discrimination claims, notwithstanding any non-assistance clauses in their release agreements; and
(2) employees of Morgan Stanley to whom the 2001 Code of Conduct applies may communicate freely with the EEOC about this action.
SO ORDERED.