Merrill Settles Racial Discrimination Suit for Nearly $20M
In a class action, Black former advisors and trainees said they were paid less and promoted less often.
Merrill Lynch has agreed to pay $19.5 million to settle a class-action lawsuit that contends the firm systemically discriminated against its African American advisors and advisor trainees.
The suit, which dates back to July 2021, was filed on May 24 in the U.S. District Court for the Middle District of Florida by Lucinda Council, Ravynne Gilmore, Verna Maitland and Hilari Ngufor.
“We reached an agreement to resolve this matter so we could focus on initiatives to assist Black financial advisors and their clients,” a spokesperson for Merrill told ThinkAdvisor Wednesday in an email.
Council and Gilmore dropped their previous case against Merrill, which was filed in 2021.
The four were formerly employed at Merrill as financial advisors, Financial Advisor Development Program trainees, and/or Financial Solutions advisors.
The suit states that they received less compensation and were promoted less frequently than their white counterparts as a result of Merrill policies and practices, including Merrill’s “minimum threshold production credit requirements, lack of support, and inequitable teaming opportunities.”
African American financial advisors “were terminated (or ‘washed out’) from employment with Defendants at higher rates” than their white counterparts, the suit states.
The proposed settlement would cover the more than 1,000 African American financial advisors nationwide that Merrill employs or has employed.
The violations of African American employees’ rights “are systemic and are based upon company-wide policies and practices,” the suit contends.
Merrill, according to the spokesperson, has “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,” the spokesperson said Wednesday.