According to the plaintiff’s attorneys, Merrill Lynch has agreed to settle a class action lawsuit regarding employment discrimination for $160 million. The suit was brought by African-American brokers eight years ago. This settlement is said to be one of the largest for an employment discrimination case.
The funds will establish a pool of money that will be divided among an estimated 1,200 current and former brokers for the firm, according to Suzanne Bish, a partner with Stowell & Friedman, the Chicago law firm that brought suit in 2005.
She said legal fees will take no more than $40 million from the settlement amount. The federal district court still has to approve the settlement.
Merrill Lynch, a brokerage firm that is a unit of Bank of America, will not confirm the settlement to media outlets. A spokesman for the firm just indicated they are working toward a positive resolution for the lawsuit and planned to enhance opportunities for African-Americans as financial advisers with the firm.
The plaintiffs faced an uphill battle during the lawsuit as district court, the court of appeals, and the U.S. Supreme Court all refused to certify the class of plaintiffs on several occasions along the way. When the suit was filed in 2005, Merrill Lynch was an independent firm that was under the direction of CEO Stan O’Neal, a black man. In his deposition, O’Neal denied that Merrill Lynch discriminated against anyone. He suggested the black brokers earned less than white brokers because white Americans have more wealth than African-Americans and felt more comfortable trusting white brokers with their investments.
More than six years into the case, in February 2012, the court of appeals certified the class action on behalf of African-American brokers at the firm. Merrill Lynch appealed the decision but was unable to get a hearing before the Supreme Court. The case had a January 2014 trial date before the settlement was reached.
Back in 2000, Coca-Cola agreed to pay a $192.5 million settlement. In 1996, Texaco agreed to a $176 million settlement. According to the lawyers for the plaintiffs, large employment discrimination settlements have been more difficult to win since those cases.
The Merrill Lynch suit was originally filed by George McReynolds, a longtime broker for the firm located in Nashville, Tenn. The lawsuit accused the firm of steering blacks into clerical positions and diverting the lucrative accounts to white brokers, which resulted in fewer career growth opportunities and lower pay.
For comments and suggestions, leave a message in the comments section below. Like and Follow our Facebook page for more stories and to stay up-to-date with the latest happenings.