A national class action lawsuit was filed in March 2010 in federal court in New York and charged Bank of America and Merill Lynch of violating federal and state civil rights laws (including Title VII, New York State Human Rights Law and the Florida Civil Rights Act of 1992) because of their gender bias practices which consisted in paying female employees less than male employees and depriving them of the opportunity to handle more lucrative accounts.
Bank of America Corp. has agreed to pay $39 million to settle these claims brought by financial advisors or licensed financial advisor trainees at Bank of America Investments Services, Inc. or Merrill Lynch alleging that they were intentionally discriminated against by the two banks which favored male brokers when awarding pay, allocating client accounts and referrals, and providing professional and marketing support.
Such practices created a cumulative advantage effect that perpetuated and widened salary disparities between male and female employees. Roughly 4,800 women were discriminated against in the investment advice division of the Bank of America and Merrill Lynch during the period of August 2, 2007 to September 15, 2013.
The parties entered into a three-year settlement agreement which is subject to approval by the United States District Court for the Eastern District of New York. The settlement includes significant monetary relief and a three year programmatic relief which will help ensure that women are treated fairly in that process and have equal opportunities in the future (an independant consultant will study the bank’s practices in order to improve them). However, under this settlement Merrill Lynch admits no wrongdoing.
This settlement mirros another discrimination claim settled by Merill Lynch less than two weeks ago, dealing with racial bias. This lawsuit was filed by black investment advisers and was settled for $160 million to be divided between 1,200 Merrill Lynch employees. That settlement is the largest racial discrimination payout on record and requires Merrill Lynch to create a “leadership council” to recommend ways to improve opportunities for black employees and candidates.
This issue of gender and racial discrimination became so important that the Dodd-Frank Wall Street reforms included a requirement that firms improve their gender and racial diversity in its section 342 – Office of minority and women inclusion. It goal is to develop and implement standards and procedures to ensure the fair inclusion and utilization of minorities and women.
If you believe you may have a class employment discrimination action against your employer, please contact The Harman Firm, LLP.