Mahmoud Latif v. Morgan Stanley & Co. LLC

Mahmoud Latif (plaintiff) accepted an offer of employment from Morgan Stanley & Co. LLC (Morgan Stanley) (defendant). The offer letter contained an arbitration clause that included Morgan Stanley’s standard arbitration agreement (arbitration agreement), and the arbitration agreement incorporated by reference the Federal Arbitration Act (FAA) as part of its terms. The arbitration agreement listed issues that must be settled in binding arbitration, and sexual harassment was not on the list. By accepting the offer of employment, Latif was bound by the arbitration agreement for all claims except sexual harassment. A few months into his employment with Morgan Stanley, Latif began complaining about inappropriate sexual conduct, sexual assault, and being targeted for harassment based on his sexual orientation, among other complaints. Following months of meetings with the human-resources department and many email exchanges, Latif’s employment was terminated. Latif sued Morgan Stanley alleging discrimination, a hostile work environment, and retaliation in violation of both federal and state laws. Latif also sought to avoid binding arbitration, wishing instead to pursue his claims in court. Latif based his efforts on the newly enacted New York Law C.P.L.R. § 7515, which rendered null and void any mandatory arbitration involving sexual harassment except if the prohibition was contrary to federal law. Morgan Stanley moved to compel arbitration on all issues, including sexual harassment. The motion was granted, and the action was stayed pending the outcome of arbitration proceedings.