Morgan Stanley is pulling out all the stops to prevent a wrongful termination suit filed by a former broker who authored a tell-all memoir from going to a public hearing.
Lawyers for the wirehouse filed a second motion Friday to move the lawsuit, filed in November by former broker Craig Schmell, to arbitration.
Mr. Schmell, 56, was fired Oct. 31 after more than 11 years at Morgan Stanley and just two weeks before the publication of his memoir,
The Uninvited: How I Crashed My Way Into Finding Myself.
In the book, Mr. Schmell
details his adventures prior to joining Morgan Stanley in 2006, in a life that involved partying with celebrities and navigating his way into high-profile events including the Grammy awards and a presidential motorcade.
The lawsuit, originally filed in New Jersey state court, charges Morgan Stanley with discrimination related to Mr. Schmell's status as a recovering alcoholic.
Morgan Stanley, which in December requested that the lawsuit be moved to the U.S. District Court of New Jersey, on March 1 was denied its original request to the move the case to arbitration.
"Morgan Stanley is desperate to have this action arbitrated because they are afraid of a public forum," said Mr. Schmell's lawyer, Joshua Bauchner, a partner at Ansell Grimm & Aaron.
In response to a request for comment, a Morgan Stanley representative emailed the following statement: "We commend individuals like Mr. Schmell who have gone through recovery. Upon review of Mr. Schmell's book, we explained our concerns about him publishing a book detailing numerous misdeeds and touting his 'gift of manipulation.' We also told him that he could lose his job if he did not adequately address our concerns. While he agreed to make certain edits, the book he intended to publish still failed to sufficiently address them. He was therefore terminated."
While lawyers acknowledge it is unusual for a defendant to file a second request to move a hearing to arbitration after it is denied, the "legal fencing" in this case still hinges on the circumstances under which Mr. Schmell may have originally agreed to arbitration guidelines.
According to Mr. Bauchner, Mr. Schmell's acceptance of arbitration came via a 2015 email from Morgan Stanley detailing revised employment terms, which included a link and a requirement to opt out of the new terms.
"They're playing this little game where they send you an email, and if you show up to work the next day it means you have consented," Mr. Bauchner said. "We're saying your arbitration game doesn't hold water."
Ira Matetsky, a partner at the law firm Ganfer & Shore, who is not affiliated with the case, said Morgan Stanley's legal strategy reflects a determined effort to keep the legal proceeding as private as possible.
"What Morgan Stanley is saying in the new motion is that the issue of whether there was an agreement to arbitrate or not should be determined by an arbitrator," Mr. Matetsky said. "Morgan Stanley has made it very clear they would rather see this case being decided before an arbitrator as opposed to out in the public where everything is posted on the internet."
