Stowell & Friedman, a Chicago-based law firm, might not want Merrill Lynch to forget about an unresolved discrimination suit it filed against the firm three years ago. Stowell lawyers filed a new suit on Friday claiming African-American and female brokers at the firm have been largely excluded from its retention-bonus plan.
The retention package, like most, is sweeter for advisors in top production levels. In the package, Merrill reps generating $1 million in production will receive a forgivable loan equal to 100 percent of their 2008 production (actually, a six-month figure, annualized) in upfront cash and deferred bonus. (For more details on the package, click here.)
According to the suit, the retention plan disadvantages African-Americans and female brokers, and disproportionately benefits white males “as favored employees whose retention is more important to Bank of America and Merrill Lynch.”A spokesperson from Merrill says, “There's no merit to these claims, and we'll vigorously defend against this suit.” Stowell and Friedman could not be reached for comment.
The new lawsuit builds on an older one: The plaintiffs claim that because of years of systemic discrimination at Merrill Lynch, African-American and female brokers have ended up in low-production quintiles and, as a result, they’ve been excluded from enjoying the higher payouts that are awarded in the retention plan.
This same group of plaintiffs (and lawyers) filed a discrimination lawsuit back in November 2005, claiming Merrill has a “long history of systemic discrimination against African-Americans and women.” The lead plaintiff in that suit (which is yet to be settled), George McReynolds, is also the lead plaintiff in the new lawsuit filed last week.
In the original suit, McReynolds, a 25-year veteran Merrill broker in the firm’s Nashville office, along with other plaintiffs, allege systematic race discrimination and retaliation against African-Americans, as well as unequal pay practices and opportunities. (Click here to read “Our Diversity Problem”, a Registered Rep. cover story about the McReynolds case and the perception among some that the industry is, in general, a place dominated by white males. Rep. noted in the story that nearly every Wall Street firm strives to recruit women and minorities—but their number in brokerage ranks remains lower than their representation in society at large. The story also notes that Wall Street firms are on the cutting edge of offering health benefits to same-sex domestic partners and to transgendered employees, according to gay and lesbian lobby groups.)
The dispute appeared to be nearing resolution after several months of settlement talks back in 2006, one in which Stan O’Neal, the former Merrill Lynch CEO and an African-American himself, personally attended. But both sides called it quits when they couldn’t agree on the amount of monetary payment that should be made to the plaintiffs.