Morgan Stanley fires workers after strip-club visit

Out-Law News | 06 Jan 2006 | 1:00 pm | 1 min. read

Investment bank Morgan Stanley has fired four employees who were found to have visited a strip-club in Phoenix, Arizona, outside working hours but in the company of a client – in breach of a strict company policy that prohibits exclusionary events.

According to the Wall Street Journal, the men – a stock-research analyst and three salesmen – visited the club in their free time during a three-day client conference organised by the bank. But one or more clients accompanied the employees on their outing, bringing the trip into the realms of company business.

As the firm has a policy prohibiting employees from participating in business events that exclude women, and a clause that forbids taking clients to adult entertainment venues in particular, Morgan Stanley took action against the men, according to the WSJ.

Robyn McIlroy, an employment law specialist with Pinsent Masons, the law firm behind OUT-LAW.COM, said that, from WSJ's report, Morgan Stanley's company policy appears to be very specific – and it seems that the employer was able to rely on that entirely to justify dismissal.

"It is perfectly permissible to have specific company policies such as those relating to conduct outside the office while on company business," she said. "But in the UK, our laws mean that unless the company could show that the employees' conduct amounted to gross misconduct, dismissals in these circumstances could be seen to be an extreme reaction and outside the band of reasonable responses of a reasonable employer."

McIlroy says the case still has relevance to UK employers, however. "It's a good example of the value of reminding workers before they attend such company conferences that office policies can still apply outside normal working hours as long as you are still on company business," she said.