Lawyers for about a dozen former Morgan Stanley advisors filed a new motion this week in a complex legal saga involving the firm's deferred compensation arrangement and its alleged refusal to pay six-figure benefits to the departed advisors.
The case, initially filed in December 2020, is set for arbitration following a ruling in November in the U.S. District Court for the Southern District of New York.
In the mixed ruling, the judge declared that Morgan Stanley's deferred compensation program is subject to the rules and requirements of the Employee Retirement Income Security Act, while simultaneously determining that the advisors must arbitrate their claims that the firm illegally withheld the deferred compensation payments after they chose to leave the firm.
The new motion was filled in response to a motion filed in December by Morgan Stanley, which called on the court to reconsider or clarify the determination in the November ruling that the deferred compensation structure in question was indeed subject to ERISA protections.
The plaintiffs' new motion, in turn, argues this reconsideration would be inappropriate, and it calls on the judge to reject the Morgan Stanley motion and allow arbitration (or further legal proceedings) to commence.
Presumably, the Morgan Stanley defendants believe the determination that its deferred compensation plan is in fact subject to ERISA will work against them in the arbitration process.
The firm declined to offer specific comments about that question or the proceedings writ large, pointing instead to the argumentation in its most recent December filing. In that document, the firm argues the specific structure of its deferred compensation plan should not trigger ERISA protections.
