Bank of America subsidiary Merrill Lynch will pay nearly $20 million to resolve a class-action lawsuit alleging it discriminated against advisers of color.
The lawsuit, filed in U.S. District Court for the Middle District of Florida, was brought by four former Merrill advisers who alleged that Black brokers were offered fewer “business opportunities” than their White peers.
“Plaintiffs further allege that African-American Financial Advisors were terminated (or ‘washed out’) from employment with Defendants at higher rates than their White counterparts and fail to advance to more senior roles,” court documents show. “Plaintiffs allege that these violations of African-American Financial Advisors’ rights are systemic and based on company-wide policies and practices.”
The legal battle began in federal court in Michigan in 2021, when two former Merrill advisers made allegations of racial discrimination. Plaintiffs Lucinda Council and Ravynne Gilmore voluntarily dismissed the suit as settlement talks progressed, according to Investment News, but refiled in Florida in 2022.
The case was recently moved to federal court from Palm Beach County, Florida, with the addition of plaintiffs Verna Dottin-Maitland and Hilari Ngufor.
A spokesperson for Merrill, which denies the claims of the lawsuit, told AdvisorHub the firm “reached an agreement to resolve this matter so we could focus on initiatives to assist Black financial advisors and their clients.”
The firm has implemented policies and programs over the last 10 years directed at increasing opportunity for workers of color, including leadership symposiums, workshops and increased training and coaching to improve diversity and inclusion, the spokesperson told AdvisorHub.
As a result, the number of Black financial advisers at the firm has risen by more than 40%, according to the spokesperson.
The $19.95 million sum, which must be approved by a judge before it’s finalized, will provide individual settlement payments to at least 1,000 eligible class members who were affected by Merrill’s alleged discriminatory practices. It will also cover plaintiffs’ $6.6 million in attorney fees.
Additionally, Merrill and its parent company have committed in the settlement to “significant programmatic relief measures” over the next five years, including an annual analysis of diversity within the company; revised diversity and inclusion training for Merrill Lynch Wealth Management employees; and the development of additional workplace initiatives to attract and retain diverse financial advisers and enhance their success.
