Merrill Lynch Class Action Lawsuit Challenges Alleged Discrimination Against Female, African American Financial Advisors

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Merrill Lynch, Pierce, Fenner & Smith Inc. faces a proposed class action lawsuit challenging the investment management company’s allegedly long and ongoing history of discrimination against African American and female financial advisors.

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According to the 17-page lawsuit, Merrill Lynch’s exclusionary culture and policies regarding succession planning, account distribution, teaming and compensation systemically deny women and African Americans equal opportunities within the firm. The case says that Merrill Lynch, despite facing 50 years of litigation over its treatment of minorities within its workforce, continues to uphold practices that courts and arbitral panels have found discriminatory.

The plaintiffs, two African American women who began their distinguished careers as financial advisors at Merrill Lynch 45 and 36 years ago, respectively, say they have been excluded from lucrative teams in favor of less-qualified white male colleagues.

“Similarly, unlike their white male peers, neither [plaintiffs] were given leads or account distributions, even when distribution policies should have ensured they both should have received accounts,” the complaint contends.

Per the filing, one plaintiff has already brought similar claims as a class representative in McReynolds v. Merrill Lynch, a lawsuit certified by the court in 2012 that accused Merrill Lynch of implementing teaming and account distribution policies that intentionally discriminated against women and African American financial advisors. Although Merrill Lynch settled the lawsuit for $160 million in 2013, the firm has failed to eliminate the teaming and succession planning practices alleged to be discriminatory, the suit says.

Beyond providing historic monetary relief, the terms of the Merrill Lynch settlement preserved employees’ right to litigate discrimination claims against the defendant in court, the case shares. In particular, the defendant promised that it would “not require arbitration of any employment discrimination claims, except as individually negotiated,” the suit says.

However, on November 8, 2024, Merrill Lynch’s parent company, co-defendant Bank of America, distributed a mandatory policy to certain employees requiring them to “forever waive and give up the right to have a court or a jury decide any covered claims,” including claims for “discrimination and/or harassment,” the suit says.

“By eliminating an essential element of the McReynolds settlement and revoking employees’ leverage to vindicate their rights in court, Defendants have signaled to [the plaintiffs] and their colleagues that Defendants no longer desire to work with their African American and female employees to eradicate the ongoing discrimination and drive positive change,” the case alleges.

The plaintiffs, described in the lawsuit as “champions of reform” who have pursued meaningful change through good-faith negotiations with Merrill Lynch, say they must now file this complaint before “the door to the courthouse closes forever.”

The lawsuit looks to represent all African American financial advisors who are or were employed by Merrill Lynch from January 18, 2023 to present, excluding individuals who are class members in Council v. Merrill Lynch, Pierce, Fenner & Smith Inc.

The suit also seeks to cover all female financial advisors who are or were employed by Merrill Lynch in New York state from January 18, 2023 to the present.

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