A settlement has been reached in a racial discrimination lawsuit filed against Merrill Lynch, according to Advisor Hub.
A filing in federal court in Florida indicated that Merrill Lynch has agreed to pay $19.95 million to settle the class-action lawsuit, which alleged that the brokerage firm discriminated against African American financial advisors
The suit claimed that these advisors 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, brought by four former Merrill advisors, alleges that this was a result of discriminatory practices at the company, which included a broader lack of support and inequitable teaming opportunities.
The plaintiffs asserted that African American brokers were afforded fewer “business opportunities,” including less support and more difficulty joining teams relative to their white counterparts.
“The violations of African-American employees’ rights are systemic and are based upon company-wide policies and practices,” the complaint said.
The settlement amount will be used to make individual payments to at least 1,000 eligible class members who were previously disadvantaged because of their race, along with paying administrative costs and $6.6 million in attorney fees. Before it becomes final, the settlement must be approved by a judge.
A spokesperson for Merrill Lynch released a statement that said in part, “We reached an agreement to resolve this matter so we could focus on initiatives to assist Black financial advisors and their clients.” The statement added that the firm has “implemented numerous policies and programs over the last 10 years,” including annual leadership symposiums, workshops and increased training and coaching to improve diversity and inclusion.
As part of the settlement, Merrill Lynch will conduct a review of the company’s current and past diversity initiatives as well as analysis of diversity metrics and pay equity. The company said it would educate employees about how to recognize bias and create an inclusive work environment. Merrill Lynch did not admit to any wrongdoing under the terms of the agreement.
The Merrill spokesperson pointed out that the number of Black financial advisors at the firm has increased by over 40% over the past decade.
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