Bank of America agreed on Friday to pay $39 million to
women who worked in its Merrill Lynch brokerage operation, another costly
settlement of a discrimination case filed by its employees. The agreement,
filed Friday evening in a federal court in Brooklyn, was the second by the
nation’s largest bank over 10 days. Last week, Merrill Lynch told a federal
judge in Chicago that it would pay $160 million to settle an eight-year-old
racial discrimination suit filed on behalf of 700 black brokers. With the new
agreement, Merrill will have paid out nearly half a billion dollars to settle
employee discrimination claims over the last 15 years. The case settled on
Friday was originally brought by women who had worked in the brokerage division
of Bank of America, but it was amended to include women who were brokers at
Merrill Lynch after the bank bought Merrill. The money is expected to be
divided among as many as 4,800 current and former employees of the two
brokerage operations. Merrill, which has about 15,000 brokers worldwide, also
agreed to change its policies to give women a better chance of succeeding.
The
firm will bring in an applied organizational psychologist to study some of its
policies, particularly how teams of brokers are formed and how they share
customers’ accounts, said Rachel Geman, a partner at Lieff Cabraser Heimann
& Bernstein and one of the lawyers who represented the plaintiffs. Bill
Halldin, a Merrill spokesman, said in a statement that the company was “pleased
to resolve this matter.” He added, “The resolution includes a number of
additional and enhanced initiatives that will enrich our existing diversity,
inclusion and development programs, providing even more opportunities for women
to succeed as financial advisers.” Merrill has a long history of litigation
over its treatment of women and minority employees. In the 1970s, the firm
settled a discrimination suit by consenting to make its work force more diverse
but never met that goal. Two decades later, Merrill settled another
class-action suit brought by women who worked at the firm and led by a
plaintiff named Marybeth Cremin. Merrill settled that suit, known as the Cremin
case, in 1998 by agreeing to a process for settling disputes with more than 900
women who filed claims. Otherwise, each of the women would have had to take her
claim to industry-sponsored arbitration — a standard agreement in employment
contracts on Wall Street.
Merrill ended up paying about $250 million to settle
the claims in the Cremin case. It also agreed to make changes to give female
brokers a better chance of succeeding in the male-dominated brokerage business.
Less than 10 years later, three women who worked in Bank of America’s brokerage
business contended that they faced the same sorts of obstacles that Ms. Cremin
had cited at Merrill. They first took their complaints to the federal Equal
Employment Opportunity Commission in 2007. In 2010, they sued Bank of America
for practices at both the bank and Merrill Lynch. Judy Calibuso, one of the
lead plaintiffs, was a longtime broker for the bank and now works for Merrill
Lynch. Another lead plaintiff, Julie Moss, said that “this settlement will
advance our efforts to foster diversity and professional success within the
work force.” Another lawyer for the plaintiffs, Cara E. Greene, a partner at
Outten & Golden, said some issues the women cited had cropped up again on
Wall Street after the Cremin case was resolved. “Speaking generally of the
industry, there have been changes that have attempted to address the gender
disparity that exists, but it hasn’t solved the problem,” Ms. Greene said.
“It’s still a well-known secret that women make less than men on Wall Street, and
that’s true in the financial advisory world. We think the settlement is a great
settlement that increases opportunities for women at Merrill Lynch going
forward as financial advisers.”
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