A class action lawsuit against financial firm Merrill Lynch may be settled after a lengthy legal process. The lawsuit, which was filed in 2005, alleges that Merrill Lynch engaged in systematic racial discrimination against African American employees. If the settlement is approved, Merrill Lynch will be paying $160 million in damages to the approximately 1,200 plaintiffs.
The lawsuit was filed by George McReynolds. He began working at Merrill Lynch in 1983, bringing the total of African American brokers working for the firm in Tennessee to two. Despite filing the lawsuit in 2005, McReynolds still works for Merrill Lynch. Nonetheless, he believes that he has been denied opportunities based on his race, and his is not an isolated sentiment among Merrill Lynch employees.
As is pointed out in the initial lawsuit filing, Merrill Lynch employs some 14,000 financial advisors, but only a handful of these professionals are black. In fact, only about 700 of those 14,000 workers are African American. McReynolds notes that racial problems at Merrill Lynch go far beyond hiring practices.
A sociology professor, William T. Bielby, contributed to the lawsuit by noting that Merrill Lynch is not a “colorblind meritocracy,” and that within the organization “race permeates policy and practices in a way that creates substantial obstacles” to minority employees.
Among the allegations leveled in the complaint are charges that African American advisors were banned from working with certain high profile clients and that some members of management advised that black employees “learn to play golf” because it was a business method with which they may be unfamiliar. A company policy meant to foster success by pairing advisors into teams was kept unavailable to African American brokers. The complaint also notes a tendency among Merrill Lynch managers to badmouth the work of minority employees in inappropriately public ways.
Although the judge has yet to approve the settlement deal, it seems likely that this agreement will eventually be accepted by the courts. The result is a win for McReynolds and his fellow plaintiffs, and may also mean increased opportunities on Wall Street for minority financial advisers.
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