Morgan Stanley Beats Worker’s Sex Harassment, Sex Bias Claims

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By Patrick Dorrian

A former Morgan Stanley employee in Chicago didn’t show remarks about her potential pregnancy and other comments were illegal sexual harassment or that she was fired because she’s a woman, a federal appeals court ruled.

Kerrie Milligan never reported any of the harassing behavior she allegedly was subjected to during her time with Morgan Stanley, the U.S. Court of Appeals for the Seventh Circuit said in its Dec. 11 ruling. The decision highlights that not reporting allegations to the employer may compromise a worker’s ability to show harassment.

The comments cited by Milligan occurred over two separate periods during her 2001–2012 tenure with the firm, the court said. But only comments allegedly made within the second period could be considered in ruling on Milligan’s harassment claim, it said.

Only the later comments occurred within the timeline for suing under federal law, and the gap between the two periods was too long for the periods to be viewed as a continuous course of conduct, the court said. The lawsuit was brought under Title VII of the 1964 Civil Rights Act. Although Milligan testified that the earlier period “probably” lasted until 2009 or 2010 and the latter period “probably” began in 2011, such “unspecific, speculative allegations cannot connect otherwise distant allegations,” the court wrote.

As for the conduct that could be considered, Judge Michael S. Kanne said that the male senior financial adviser Milligan partnered with allegedly made remarks regarding revealing outfits worn by a CNBC news anchor and asked Milligan if she planned to get pregnant and to plan any pregnancy around his work schedule. But these didn’t amount to sexual harassment, the judge said.

The comments, questions, and requests were pervasive, but they didn’t interfere with Milligan’s work performance, Kanne said. An additional comment by another co-worker that Milligan planned to start a family wasn’t enough to help her meet the legal standard for proving sexual harassment, he added.

Discriminatory Discharge Also Not Shown

Milligan also failed to show her Sept. 24, 2012, discharge was based on her sex, the court said. Morgan Stanley fired her for processing a fraudulent wire transfer from a customer account, the court said.

Milligan didn’t point to a male colleague who engaged in the same misconduct and had a similar disciplinary history but was allowed to keep his job, the court said. She also failed to show that the co-workers who allegedly made sexist remarks to and about her influenced the Chicago branch manager’s decision to fire her.

Kanne rejected Milligan’s contention that Morgan Stanley didn’t have a clear policy regarding fraudulent transfer requests. The firm had “numerous guidelines in place,” he said. Milligan may not have understood those guidelines or may have been punished too harshly for not complying with them, but as long as her sex didn’t influence the decision to fire her, a jury wouldn’t be able to find that her discharge was discriminatory, Kanne said.

The close timing—a few days—between the last of the allegedly harassing comments and Milligan’s termination likewise didn’t establish sex bias, the court said. There was a “non-suspicious explanation” for why she was fired when she was: the investigation into her handling of the fraudulent transfer request had just concluded.

Judges William J. Bauer and Frank H. Easterbrook joined the opinion.

Canel, King & Jones represented Milligan. Greenberg Traurig LLP represented Morgan Stanley.

The case is Milligan-Grimstad v. Stanley , 2017 BL 441960, 7th Cir., No. 16-4224, summary judgment affirmed 12/11/17 .

To contact the reporter on this story: Patrick Dorrian in Washington at

To contact the editor responsible for this story: Terence Hyland at

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