Bank of America Corporation’s Merrill Lynch & Co. Inc. subsidiary has agreed to pay $160 million to settle claims that it discriminated against its black financial advisers.
Both sides are currently working toward finalizing the details of the settlement. They hope to present the settlement to an Illinois judge for approval next week.
The agreement, if approved by the court, would end litigation that has been pending for eight years. The plaintiffs targeted two Merrill policies that they claim discriminated against black brokers, limiting their compensation and future earning potential.
One of those policies was Merrill’s teaming policy, which allowed brokers to form teams that shared customers in order to boost business for each team members. The other was its account distribution policy, under which the clients of departing Merrill brokers were assigned to those still employed by the company.
The litigation has been a back-and-forth battle for the plaintiffs. In 2011, U.S. District Judge U.S. District Judge Robert W. Gettleman denied the brokers’ bid to have the case proceed as a class action. A federal appeals court later overturned that decision.
When the lawsuit was filed, plaintiffs sought to represent approximately 700 current and former brokers. The number has now increased to more than 1,000.
The case is McReynolds et al. v. Merrill Lynch & Co. Inc., case number 1:05-cv-06583, in the U.S. District Court for the Northern District of Illinois.