Merrill Lynch to Pay ‘Largest Settlement Ever’ for Bias Case at $160M
09/19/2013 // Keller Grover LLP (Press Release) // Eric Grover // (press release)
One of the largest U.S. brokerage firms has agreed to settle a racial bias lawsuit, making it the highest payout ever awarded to plaintiffs in a racial discrimination lawsuit filed against an American employer. After spending eight years fighting the case through the federal courts, including two appeals to the United States Supreme Court, Merrill Lynch agreed to pay a $160 million to 700 black brokers, reports Los Angeles employment lawyer Eric Grover of Keller Grover.
The class action lawsuit, which was originally filed by George McReynolds in 2005, asserted that black Merrill Lynch brokers were ostracized by their co-workers and were given little help by their managers, which left them at a disadvantage year after year. In fact, most of Merrill’s black brokers were considered “poor producers.”
Merrill Lynch’s first black CEO, E. Stanley O’Neal, even admitted that black brokers may have had a more difficult time as brokers because the majority of their prospective clients were white, and might not trust their money with someone of a different skin color.
A trial date was set for January 2014, after Merrill Lynch appealed a Supreme Court decision granting class certification, but Merrill Lynch decided to “wave the white flag” and settle the lawsuit after eight years of legal battles.
“This is a somewhat heroic story because these plaintiffs just kept fighting and fighting,” said John C. Coffee Jr., a professor at Columbia Law School said to the New York Times. “This is like a triple-overtime win.”
The multi-million dollar settlement will be shared by all black brokers and trainees employed by the firm since May 2001, and will also require Merrill Lynch to take advice on how to improve the success of black employees as brokers from its African American staff.
This settlement trumps past racial bias lawsuits; Morgan Stanley’s $16 million that they agreed to pay in 2008 to settle a suit, as well as Coca-Cola’s racial discrimination lawsuit that paid out more than $156 million in 2000.
“This should send a message to all employees, who have been wronged by their employer, that they should never give up,” says Grover, a Los Angeles employment lawyer. “Not every case is cut and dry, some take months or years, but in the end, justice will be served just as in the Merrill Lynch case. Not only do you have to take a stand for your rights, it is important to stand your ground and keep fighting for what is right.”
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