After more than three years of negotiations
Under a preliminary settlement filed alongside the complaint last month in the federal court of Jacksonville, Florida, Merrill would pay the lead plaintiffs — former advisors Lucinda Council, Ravynne Gilmore, Verna Maitland and Hilari Ngufor — and other African American advisors employed by the firm between October 2016 and the resolution of the case damages and attorney fees of $19.95 million. The agreement is awaiting court approval more than a decade after Merrill
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The outcomes reflect the mixed signs of progress at firms like Merrill. The
"Plaintiffs brought this case to challenge discriminatory compensation and promotion practices at Merrill based on race and/or color. The proposed settlement of this important civil rights issue remedies the policies and practices that plaintiffs challenged, thereby increasing opportunities for African American Financial Advisors who were previously disadvantaged because of their race and/or color," the May 24 settlement stated.
"The named plaintiffs collectively allege on behalf of themselves and settlement class members that they have experienced, and do experience, race and/or color discrimination in aspects of their employment, including, but not limited to, in compensation, teaming or pooling opportunities, distribution of accounts, career advancement, work assignments, termination and/or other terms and conditions of employment," it continued. "Plaintiffs' complaint seeks recovery of backpay wages, plus interest and attorneys' fees and costs."
The plaintiffs had first filed the case in Detroit federal court before a joint dismissal there in
"We reached an agreement to resolve this matter so we could focus on initiatives to assist Black financial advisors and their clients," Bill Halldin, a spokesman for Merrill parent Bank of America, said in a statement. "We have implemented numerous policies and programs over the last 10 years, such as annual Leadership Symposiums, workshops, and increased training and coaching. The number of Black financial advisors at Merrill has increased by more than 40% and their representation on teams has more than tripled."
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Attorneys for the plaintiffs didn't respond to an email seeking comment on the case or the settlement, which stipulated in a "confidentiality" section of the agreement that neither party would discuss the negotiations or make comments to the media about the outcome. Under the settlement, the plaintiffs' attorneys would receive $6.58 million, or one-third of the payout, plus $92,280 in litigation expenses, according to an unopposed filing last week on their pay.
For Black wealth management professionals, the industry's track record in such court cases shows the struggles overcome by many advisors or employees navigating "hostile working environments" rather than "nurturing and accommodating" organizations, longtime Merrill branch manager and executive Curts Brown
"I have had many conversations with both men and women of color who tell me they are tired of 'taking the pain' and want Wall Street firms to act, stop discriminatory practices and provide equality for them in assignments of client accounts, opportunities to become a part of financial advisor teams and fairness when it comes to promotions and pay equality," Brown wrote in "
"The key to recruiting more African Americans to these firms is by tapping into the power of our community," he continued. "The referrals from African Americans themselves can make all the difference. However, if they are not treated fairly, they will be less likely to encourage other African Americans to come into the industry. It is downright absurd to exclude smart and qualified African American men and women from our teams. It's been over four decades since I was hired and we have not come far as we should."
Merrill learned of the advisors' allegations as early as September 2020, when their lawyers sent the firm a letter about their claims and interest in exploring a potential resolution, according to the settlement. Company officials then shared hiring, promotion and compensation data and policies with the plaintiffs as part of an investigation into discriminatory practices at the firm and entered into "good-faith, arms-length" mediation that lasted from at least May 2021 up until the settlement agreement last month, the document stated.
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Besides the payments of damages to Black advisors, the settlement would require revisions of the company's diversity and inclusion training for employees, analysis of Black representation metrics on at least a yearly basis, regular reviews of Merrill policies, more workplace retention, professional development and mentoring programs and the appointment of outside labor economist to study pay equity at the firm. The plaintiffs had alleged that Black advisors at Merrill get lower pay and fewer promotions than their white colleagues because of discriminatory practices such as "minimum threshold production credit requirements, lack of support and
inequitable teaming opportunities" that make them more likely to be "terminated (or 'wash out') from employment," the complaint stated.
The settlement included language about Merrill's continuing denial of the allegations. The company has taken "a number of actions over the last decade to help improve opportunities available to African American employees," like the annual African American Leadership Symposium and coaching for Black advisors through workshops on best practices and career strategies, according to the document. Regardless, the "parties concluded that it is in their best interest to resolve" the case, it stated.
"Defendants believe that they treat all employees fairly and equally regardless of race or color and are committed to ensuring equal employment opportunity," the document said. "To that end, defendants believe that all financial advisors have the same opportunities to earn compensation regardless of race or color and are paid based on their success in advising clients."
