Merrill Lynch and its parent company, Bank of America, have are paying nearly $20 million to resolve a class action lawsuit alleging discriminatory practices against African American financial advisors.
The wirehouse has agreed to a $19.95 million settlement, pending court approval, which addresses claims that the wirehouse’s policies have limited business opportunities, client leads, and compensation for African American advisors since 2016.
The plaintiffs, four former Merrill Lynch financial advisors, argue that systemic discrimination has resulted in fewer career advancement opportunities and higher termination rates for African American advisors compared to their white counterparts.
The lawsuit, filed in the U.S. District Court for the Middle District of Florida, claims these practices have caused significant professional and financial harm to African American employees.
“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,” the plaintiffs allege.
The complaint further highlights a gap in compensation and promotions between African American and white advisors at Merrill Lynch.
The legal battle’s roots go back to July 2021, when ex-Merrill advisors Lucinda Council and Ravynne Gilmore filed a lawsuit against their former employer in the U.S. District Court for the Eastern District of Michigan.
That suit claimed that African American advisors faced systemic discrimination, resulting in lower compensation and fewer promotions. The two voluntarily dismissed that action as settlement talks progressed, but the suit was refiled in January 2022 in Palm Beach County, Florida, before being moved to federal court last week.
The current class action includes additional plaintiffs, former Merrill advisors Verna Dottin-Maitland and Hilari Ngufor.
The settlement agreement, reached after mediation in September 2021, covers all African American Merrill employees who held positions as financial advisors, financial advisor development program trainees, or financial solutions advisors from November 23, 2016, to December 23, 2022.
The four named plaintiffs negotiated separate settlements, the details of which were not disclosed.
In addition to the financial settlement, Merrill Lynch and Bank of America have committed to five years of programmatic relief, which includes diversity and inclusion training for Merrill Lynch Wealth Management employees and an annual analysis of diversity metrics within the company.
This settlement follows a previous $160 million agreement Merrill Lynch reached in 2013 to resolve another racial class action filed by a group of advisors, which grew to include as many as 1,200 representatives.
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