Brokerage firm Merrill Lynch has agreed to pay $160m to settle a class-action race discrimination lawsuit brought by a longtime US employee, an attorney for the plaintiffs said.
More than 1,200 current and former Merrill Lynch employees could be eligible to take part in the settlement announced on Wednesday, one of the largest sums obtained from an employer in a race bias lawsuit.
Since the lawsuit was filed in 2005, Merrill Lynch was acquired by Bank of America, where it is now the bank’s wealth management unit.
Preliminary settlement terms will be presented to a federal judge at a hearing on September 3, said Suzanne Bish, one of the Stowell & Friedman attorneys representing the workers.
“We are working towards a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers,” Bank of America spokesperson Bill Halldin said, declining to comment further on the status or specifics of the case.
Lead plaintiff George McReynolds, a black broker who has worked for Merrill Lynch for 30 years, sued his employer, saying it had a segregated workforce, including policies that steered black brokers into clerical positions and reassigned their accounts to white workers.
We are working towards a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers
At the time McReynolds filed the lawsuit, two percent of the brokers at Merrill Lynch were black, despite a 30-year-old consent decree it had signed with the US Equal Employment Opportunity Commission that required the brokerage to increase its proportion of black brokers to 6.5 percent.
Though the Nashville, Tennessee office where McReynolds worked had grown to employ 65 to 70 brokers, there were never more than three black brokers at any time, the lawsuit stated.
Office mangers resisted McReynolds’ attempts to recruit and retain diverse candidates and forced him into a partnership with a “white rookie” that was “highly detrimental” to his career, McReynolds reported.
McReynolds suffered a series of early setbacks in bringing the lawsuit.
The federal judge in Chicago handling the case had earlier denied a motion to certify it as a class action, a ruling that was affirmed by the 7th US Circuit Court of Appeals and the US Supreme Court.
Bish credited the “tenacity” of McReynolds and other plaintiffs in arriving at the proposed settlement. She said they would work with Merrill Lynch to improve the advancement opportunities available to minority brokers.