Bank of America Corp. has been accused in a federal lawsuit of discriminating against female brokers at the former Merrill Lynch & Co. by offering them lower retention bonuses than male counterparts. The lawsuit, filed in New York, seeks class-action status. Female brokers allege that they were, typically, eligible for lower bonuses because of gender bias at Merrill, and that wealthier clients were steered to male brokers. It is alleged further that, because bonuses were based on “production,” or fees earned on client assets, the bonus distribution authorized by Bank of America “disproportionately disadvantages women and advantages white men as favored employees.”
It’s not common for a company in the brokerage business to use retention bonuses. These bonuses are often awarded to brokers who work at companies being acquired to keep them from defecting to competitors. It’s reported that for top producers bonuses can reach seven figures. Bank of America has said it has about 15,800 brokers, according to reports, most of which came from Merrill. Chief Executive Kenneth Lewis has referred to the brokerage business as the “crown jewel” of Merrill. Bank of America bought Merrill on January 1st of this year.
The case was brought by Jaime Goodman, who has worked at Merrill since 1992. In the Complaint, she alleges that she has been a “top-quintile performer” and “a $1 million producer for nearly a decade,” but would have performed even better and gotten a higher retention bonus absent discrimination. The Plaintiff is seeking compensatory damages, including the value of all compensation and benefits lost because of the alleged bias, as well as punitive damages and other remedies. Linda Friedman, a partner at Stowell & Friedman Ltd in Chicago, who is representing the Plaintiff, said:
The idea of a retention bonus is to retain the best and the brightest. Bank of America acquired a company that had a history of mistreatment. Rather than acknowledge that, and be part of the solution to level the playing field, Bank of America picked up where Merrill Lynch left off.
This lawsuit is very important for obvious reasons and will be watched closely by female workers nationwide.
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