Merrill Lynch Rejected by High Court on Broker Bias Suit
The justices today left intact a federal appeals court ruling that let the case go forward as a class action. The suing workers say that they are paid less than their white counterparts and that Merrill’s policies are to blame. Bank of America, based in Charlotte, North Carolina, acquired Merrill in 2009, after the suit was filed.
The workers say black brokers were paid 33 percent to 42 percent less than white colleagues with the same job, education, experience and office location. The workers say the pay disparity stems from Merrill’s policy of letting advisers work together on teams and its method of distributing the accounts of retiring or departing financial advisers.
The Chicago-based 7th U.S. Circuit Court of Appeals said the case could go forward as a class action to determine whether the two policies had a so-called disparate impact on black employees. Writing for the court, Judge Richard Posner said individual trials could be used to determine damages, if necessary.
Merrill argued unsuccessfully in its appeal that its case was similar to the Wal-Mart Stores Inc. (WMT) class action blocked by the Supreme Court in a 2011 decision.
The brokers, led by George McReynolds, urged the high court to reject the appeal.
The Supreme Court rejected an appeal by the workers a year ago, after the lower courts had ruled the brokers didn’t have enough in common to proceed in a single class action. The 7th Circuit revisited that conclusion in light of the Wal-Mart ruling and decided the case could go forward.
The case is one of two filed by McReynolds. In September the same federal appeals court threw out a suit accusing Merrill and Bank of America of devising a discriminatory retention bonus plan as part of the acquisition.
The new case is Merrill Lynch v. McReynolds, 12-113.
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