Black Brokers’ Bias Suit Against Bank of America/Merrill Dismissed

By | March 31, 2011

Bank of America Corp. won the dismissal of a bias lawsuit by black financial advisers at the former Merrill Lynch & Co. who said they were paid lower bonuses than white counterparts to stay on when the companies merged.

Wednesday’s dismissal by U.S. District Judge Robert Gettleman in Chicago is the latest setback for the brokers, who had first accused Merrill in a related case dating to 2005 of systematic discrimination in hiring, pay and promotions.

Gettleman had previously twice denied the brokers’ request in that case for class-action status. The brokers have asked a federal appeals court to review his decision.

Merrill had employed more than 15,000 brokers before Bank of America bought the company on Jan. 1, 2009, creating the largest U.S. bank by assets.

Retention bonuses are often awarded to brokers who work at companies being acquired, to keep them from defecting, and can reach seven-figure sums for top producers.

The black brokers had complained that their bonuses were based on “production,” or fees earned on client assets.

They said this caused them to be grossly underrepresented in top quintiles and overrepresented in bottom quintiles because of Merrill’s earlier discrimination, including its alleged steering of lucrative accounts to white brokers.

But Gettleman said there was no showing that Charlotte, North Carolina-based Bank of America designed its bonus program with an intent to discriminate.

“Knowledge of past and even present discrimination alone does not make it plausible that defendants actually adopted the advisor transition program with discriminatory intent,” the judge wrote.

Both cases were brought on behalf of George McReynolds, a former Merrill broker in Nashville, and other brokers.

“The plaintiffs absolutely intend to collect the bonuses they were denied, by proving that Merrill engaged in a pattern and practice of discrimination,” Linda Friedman, a partner at Stowell & Friedman Ltd in Chicago representing the black brokers, said in an interview.

Friedman said her clients in the McReynolds litigation plan to pursue bonus claims through the original 2005 lawsuit.

Bank of America spokesman Bill Halldin said the bank is pleased with the judge’s decision.

The bank in November settled a gender bias lawsuit in New York by former Merrill female brokers, also represented by Friedman, for an undisclosed amount.

The case is McReynolds et al v. Merrill Lynch & Co et al, U.S. District Court, Northern District of Illinois, No. 08-06105.

(Reporting by Jonathan Stempel in New York; Editing by Tim Dobbyn)

Topics Lawsuits USA Agencies

Was this article valuable?

Here are more articles you may enjoy.