Shafer v. Morgan Stanley

Plaintiff brought this class action law suit on behalf of himself and other beneficiaries of Morgan Stanley’s Deferred Compensation Program for Financial Advisors (FAs). Plaintiff alleges that Morgan Stanley caused FAs to forfeit their deferred compensation in violation of the Employee Retirement Income Security Act of 1974 (ERISA) when they left the company. Morgan Stanley allocates 75% of an FAs’ deferred compensation to the Morgan Stanley Compensation Incentive Plan (MSCIP), which vests in six years, and 25% of deferred compensation to the Morgan Stanley Equity Incentive Compensation Plan (EICP), which vests in four years. Plaintiff alleges that they were forced to give up their deferred compensation if they left Morgan Stanley before these vesting dates. Plaintiff was denied over $500,000 in deferred compensation that he earned under the FA Deferred Compensation Program for nine years of work as a Financial Advisor at Morgan Stanley from 2009-2018.

Defendants filed a Motion to Compel Arbitration and to Stay Proceedings on May 5, 2021, which Plaintiffs have opposed. The parties are currently waiting for a ruling on the motion.