Bank of America Corp. and Merrill Lynch & Co. won dismissal of a lawsuit by black financial advisers that accused them of devising a discriminatory retention bonus plan after the bank announced a proposal to buy the securities firm in 2008.
U.S. District Judge Robert Gettleman in Chicago yesterday threw out the case, the second race-related suit filed against Merrill in the name of Nashville broker George McReynolds.
He is lead plaintiff in a 2005 case claiming the New York-based securities firm, bought by Bank of America in 2009, discriminated nationally against African-Americans, suppressing their ability to economically compete with white colleagues.
“Knowledge of past and even present discrimination alone,” doesn’t make it “plausible” that the defendants adopted the retention bonus plan with discriminatory intent, the judge said. “A remedy lies in challenging those other violations directly.”
Gettleman specifically exonerated the Charlotte, North Carolina-based Bank of America, saying there were “simply no facts in the complaint” to suggest the lender ever discriminated against African-Americans.
The largest U.S. lender by assets acquired Merrill Lynch for $33 billion in an all-stock transaction that closed in January 2009.
“We have no intention of letting this company escape liability,” plaintiffs’ attorney Linda Friedman, who filed both cases, said in a telephone interview today. She said it is too soon to know whether the dismissed claims will be pursued on appeal or in the older McReynolds case.
Friedman is seeking U.S. appeals court permission to challenge rulings in the first case denying the brokers’ ability to sue as a group. If that denial stands, the more than 200 brokers comprising the class may pursue their claims individually, she said.
“We’re pleased with the court’s decision,” Bill Halldin, a spokesman for both companies, said in a phone interview.
The dismissed case is McReynolds v. Merrill Lynch & Co., 08cv6105, U.S. District Court, Northern District of Illinois (Chicago). The pending case is McReynolds v. Merrill Lynch & Co., 05cv6583, U.S. District Court, Northern District of Illinois (Chicago).