Bank of America Corp.’s Merrill Lynch unit has agreed to pay $160 million to settle a discrimination lawsuit filed by American-American financial advisers. The case, filed in 2005, was brought on behalf of one employee. It grew to as many as 1,200 class representatives before the case was settled. The settlement agreement is scheduled to be considered for approval by a federal judge in Chicago September 3rd.
The central claim of the suit was that blacks weren’t given the same business opportunities as whites in participating on investment teams and in account distribution. The formation of adviser teams is said to be one of Merrill’s most important business strategies. It was alleged that black advisers were segregated and excluded from the teams and the benefits and business resources afforded to team members.
Interestingly, U.S. District Judge Robert Gettleman in Chicago rejected the case as a class action three times before a federal appeals court finally approved it. The black advisers won class certification based on a 2011 U.S. Supreme Court ruling. In that case women suing Wal-Mart Stores for gender bias on behalf of 1.5 million co-workers failed to prove the company had a “nationwide policy” that led to gender discrimination. But that was not the situation in the Merrill Lynch case. The advisers’ suit was based on claims that the discrimination was due to “very centralized control by Merrill Lynch.” Without the class certification, individual claims would have to be tried repeatedly in federal courts across the U.S. After the February 2012 appeals court ruling, Judge Gettleman issued an order certifying the class of “all African-Americans employed by Merrill Lynch at any time since July 10, 2004, as financial advisers or financial adviser trainees” in the U.S. retail brokerage unit of the firm’s global private client division. Susan A. Bish, a lawyer with Stowell & Friedman, a Chicago firm, represents the plaintiffs. She did a very good job in the case.
Source: Insurance Journal
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