January 05, 2006
While at the AALS Conference, I Have Not Witnessed Any of This
Posted by Christine Hurt

But, I probably wouldn't have been invited.  The WSJ reports today that four Morgan Stanley has fired four employees for taking clients to an "adult entertainment" venue during a business trip.  Although in years past this may have been business as usual, after MS had to pony up big bucks in 2004 in a sex discrimination case brought by a female trader (which Scott Moss, who worked on the case, can tell you about personally at any time!), MS now has rules forbidding such exclusionary outings on business trips. 

Biltmore When I started practicing law in 1993 in the South, stories of these types of jaunts among attorneys and attorneys/clients were widespread.  (If you've ever driven on the Loop in Houston and looked at the billboards, you know how widespread this type of activity is!)  But surely we've come a long way since then.  Notably, the MS guys were at the Arizona Biltmore.  If you can't think of anything else to do at one of the most beautiful places in the world than go to a sleazy strip club, there's something wrong with you.

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Comments (13)

1. Posted by Kevin on January 5, 2006 @ 9:22 | Permalink

"If you can't think of anything else to do at one of the most beautiful places in the world than go to a sleazy strip club, there's something wrong with you."

Yeah, like order up a dozen Shiner Bocks from room service and watch football on television.

2. Posted by Andrew Liu on January 5, 2006 @ 9:48 | Permalink

You think this stuff doesn't happen any more? Check what they're still doing in Asia: Seoul, Tokyo, Hong Kong, Shanghai, Bangkok, Manila, Ho Chi Minh City, you name it. Sometimes just among the boys, without the clients.

3. Posted by The Banker on January 5, 2006 @ 10:48 | Permalink

"If you can't think of anything else to do at one of the most beautiful places in the world than go to a sleazy strip club, there's something wrong with you."

Oh, I can think of a lot of other things to do, but this seems like a lot of fun! What is so wrong with strip joints? Morgan Stanley will never build a major investment bank acting like people's parents. What's next? Cheesy diversity programs???

4. Posted by StanTheMan on January 5, 2006 @ 11:05 | Permalink

I'm guessing it was dark when they went to the strip club. They probably got tired of looking at airplanes circle over Camelback Mountain through the brown cloud.

5. Posted by Cheryl on January 5, 2006 @ 12:15 | Permalink

I agree the behavior was inappropriate for a business relationship. Whether these shows are legal, whether the individual has every right to visit there, these trips are inappropriate for business activities.

A lone woman in the group would not likely speak up but would be tortured by the need to be with the group in all its activities.

Talk about a hostile work environment...

6. Posted by Scott Moss on January 6, 2006 @ 21:13 | Permalink

Best line from the news coverage I've seen:

"The move, described by a leading employment lawyer as 'harsh and unprecedented in a client-driven business,' has stunned the city and Wall Street, where staff regularly visit such venues."

I'd kill to know the identity of the alleged "leading employment lawyer"; I have a strong hunch I know. While companies with discriminatory practices have to bear their own responsibility, I also blame that kind of lawyer -- the one who makes a nice living telling every client, "you did nothing wrong, and if you lose, it's because the system is so crazy, not because I gave you bad advice telling you whatyou want to hear."

7. Posted by robin hood on January 7, 2006 @ 11:37 | Permalink

Well in the present cultural climate, if the guys wanted to do some guy thing together, instead of going to a strip club they could have all gone up to Camelback Mountain together -- is that the name of that mountain? Would that be PC? Legally acceptable?

8. Posted by Scott Moss on January 7, 2006 @ 20:35 | Permalink

It depends, "robin": Would the mountain trip deprive women of opportunities to participate in an important part of the business? Would the mountain trip amount to a "location of doing business" in which women are not welcome? Further, would male salespeople use mountain trips to poach female salespeople's clients, just as male salespeople can and do use strip club trips to poach female salespeople's clients?

If you think abotu it for just a second or three, the answer to all of my questions is "no." So there is zero comparison to the strip clubs, whatever you think of "the present cultural climate," "PC," "the war on Christmas," or whatever other cultural/political pet peeve you have.

9. Posted by PG on January 8, 2006 @ 13:41 | Permalink

Unless mountains have policies of not permitting entrance to women, period, or entrance to women unaccompanied by men, the parallel is nonexistent. Moreover, I hadn't realized that going up mountains was a "guy thing" -- does the penis actually aid rock climbing, or is that meant to be a proxy for upper body strength?
Incidentally, I would consider mountain-climbing to be a bad suggestion if any of the employees on the trip are disabled in such a way that would preclude their being able to participate (say, a 40 year old male with a heart condition that creates shortness of breath), but my attitude is doubtlessly a product of "political correctness" rather than "good manners and decency."

I'm honestly surprised that going to a strip club is considered good interaction with a client; don't they worry that the client will turn out to be religious or have other reasons to find such a suggestion offensive? Sensitivity to a diversity of values and preferences doesn't benefit only obvious minorities.

10. Posted by Scott Moss on January 8, 2006 @ 17:43 | Permalink

To go a bit further on why I think Morgan Stanley did the right thing here for reasons other than mushy fairness/PC: I see "businessmen" going to strip clubs on the company dime as basically (a) a standard principal-agent problem of misusing company resources for one's own entertainment and (b) an attempt by men to exclude, or at least disadvantage, their competition (i.e., women) in the relevant labor market.

There's a wide body of literature on how discrimination isn't necessarily efficient catering to employee or client preferences, but instead may reflect a standard range of corporate inefficiencies.

Anyone rolling their eyes at diversity efforts, crackdowns on discriminatory practiecs, etc., should realize that anti-discrimination efforts aren't all that different from other efforts (A) by a company to run itself efficiently and (B) by a society to assure an optimally fluid labor market.

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