NEW YORK (AP) — Merrill Lynch has agreed to pay nearly $20 million to settle a class-action lawsuit that accuses the Wall Street brokerage giant of racially discriminating against its Black financial advisers.
The lawsuit alleges that African American advisers employed by Bank of America-owned Merrill received less compensation and promotions than their white counterparts — and were terminated at higher rates than their white colleagues, with fewer advancing to more senior roles. The case alleges that this was a result of discriminatory practices at the company, which included a broader lack of support and inequitable teaming opportunities.
“The violations of African-American employees’ rights are systemic and are based upon company-wide policies and practices,” reads the suit, filed in U.S. District Court for the Middle District of Florida last week. The complaint was brought by four former Merrill advisers.
According to a May 24 motion for settlement, Merrill has agreed to pay $19.95 million — which, beyond attorney fees and administration costs, is set to compensate class members with individual payments. The plaintiffs expect there are about 1,375 eligible class members.
As part of the settlement, which still needs a judge's approval, Merrill has also agreed to additional “programmatic relief” — including a review of the company's current and past diversity initiatives as well as analysis of diversity metrics and pay equity. Merrill does not admit to any wrongdoing under the settlement's terms.
In a statement to The Associated Press, Bank of America said that the company “reached an agreement to resolve this matter so we could focus on initiatives to assist Black financial advisers and their clients.”
Charlotte, North Carolina-based Bank of America, which acquired Merrill in 2008, added that it had “implemented numerous policies and programs over the last 10 years" — including increased training aimed at improving diversity and inclusion. In that time, the company noted, the number of Black financial advisers at Merrill has increased by over 40% and representation on teams has more than tripled.
This legal battle dates back several years. According to the motion for settlement, the class counsel first sent Merrill a letter informing the company of the plaintiffs' allegations back in September 2020, and negotiations between the parties continued in the months and years following.
In July 2021, a class action complaint was also filed in federal court in Michigan — but the plaintiffs voluntarily dismissed the action in November 2022, so that settlement negotiations could conclude, last week's motion notes.
Just over a decade ago, in August 2013, Merrill agreed to a sweeping settlement following previous allegations of racial discrimination from Black financial advisers. At the time, the company agreed to pay $160 million and implement a list of measures aimed at improving diversity in the workplace.