Merrill Lynch pays $160 million dollars for creating “toxic” environment for Black brokers
By Barry Burch Jr.
A racial discrimination lawsuit filed back in 2005 against Merrill Lynch has finally come to a conclusion. In what the New York Times has reported as the “largest sum ever distributed to plaintiffs in a racial discrimination suit against an American employer,” Merrill Lynch agreed to settle the long pending class action suit for $160 million dollars.
Merrill Lynch employs around 14,000 brokers and was purchased by Bank of America in 2009. In 2005, when this lawsuit was initiated, there were 25 states in which Merrill Lynch had no Black brokers. George McReynolds, a man who is still on the payroll at Merrill Lynch, saw the impediments facing Black brokers and instituted a racial discrimination action.
McReynolds alleged, amongst other things, that Merrill Lynch failed to send lucrative clients to Black brokers and treated and rewarded Black brokers as though they were poor performers; failing to bring them in with wealthy white clients and promoting an atmosphere of racial division, thus creating what the lawsuit calls a “toxic” environment.
One factor which likely tipped the scales in favor of settlement, was former Merrill Lynch CEO, E. Stanley O’Neal’s statement that it was more difficult to be a Black broker. He was the first Black CEO Merrill Lynch had and he presented the firm’s unstated viewpoint that “most of the firm’s prospective clients were white and might not trust their wealth to brokers who were not.”
After settlement rumors were released, Bill Halldin, a Merrill Lynch spokesperson announced, “We are working toward a very positive resolution of a lawsuit filed in 2005 and enhancing opportunities for African-American financial advisers.”
Although hopes of change are high, unfortunately, this isn’t the first time Merrill Lynch has encountered a challenge to its corporate environment. In 1998, the company was sued by 900 women for gender discrimination—which it settled; and in 2013, a 21-year-old in-tern was found lifeless after working three straight all nighters and collapsing in his home.
The culture Merrill Lynch has created is seemingly not conducive to a positive, growth oriented work environment. Bank of America’s 2009 buyout may restructure some existing policy and hopefully truly enhance opportunities for Black brokers who have been held back, literally forever.
