Black Merrill Lynch Brokers Get Class Action Green Light

African American brokers who accused Bank of America’s Merrill Lynch unit of bias can pursue their claims of racial discrimination collectively as a class action lawsuit, a federal appeals court said, reversing a lower-court ruling.

The 7th U.S. Circuit of Appeals in Chicago said “we have trouble seeing the downside” of letting roughly 700 current and former African American brokers collectively sue Merrill Lynch over alleged discrimination that kept their pay down and impeded their career growth.

The brokers allege in the Merrill Lynch discrimination class action lawsuit that Merrill Lynch steered African Americans into clerical positions, diverted lucrative accounts to white brokers, and created a hostile work environment.

The decision is a huge win for the brokers as it comes just eight months after the U.S. Supreme Court made it significantly harder to pursue class action cases in its infamous Wal-Mart Stores, Inc. v. Dukes decision. In that case, a divided Supreme Court dismissed a class action lawsuit brought on behalf of 1.5 million female workers who claimed sexual discrimination because it found that the proposed class raised too many different claims that were often based on decisions made at the local store level.

The panel said in its Merrill Lynch decision that while it recognizes that individual managers’ discretion played a huge role in career development – a key reason the Wal-Mart case was struck down – common issues made it more efficient to handle the brokers’ cases as a collective class.
 
“There is no indication that the corporate level of Merrill Lynch (or its parent, Bank of America) wants to discriminate against black brokers. Probably it just wants to maximize profits,” wrote Jude Richard Posner. “But in a disparate impact case the presence or absence of discriminatory intent is irrelevant.”

The Merrill Lynch Black Broker Discrimination Class Action Lawsuit was brought on behalf of all brokers and trainees who had worked in the Global Private Client Unit since January 1, 2001. The Plaintiffs are alleging systematic discrimination at Merrill Lynch and are seeking to “level the playing field for African Americans” at the company.

 

The case is McReynolds et al v. Merrill Lynch, et al., Case No. 11-3639, 7th U.S. Circuit Court of Appeals.