Black Brokers' Suit against Merrill Dismissed

The decision by U.S. District Judge Robert Gettleman of the U.S. District Court for the Northern District of Illinois is the latest setback for the brokers, Reuters is reporting. The plaintiffs claimed they were discriminated against regarding retention bonuses after Bank of American bought Merrill Lynch; they had first accused Merrill in a related case in 2005 of systematic discrimination in hiring, pay and promotions.

Reuters said Merrill had employed more than 15,000 brokers before Bank of America bought the company on January 1, 2009, creating the largest U.S. bank by assets.

The black advisers had complained that their bonuses were based on “production,” or fees earned on client assets. They said this caused them to be grossly underrepresented in top quintiles and overrepresented in bottom quintiles because of Merrill’s earlier discrimination, including its alleged steering of lucrative accounts to white brokers.

However, Gettleman said there was no showing that Bank of America designed its bonus program with intent to discriminate. “Knowledge of past and even present discrimination alone does not make it plausible that defendants actually adopted the adviser transition program with discriminatory intent,” the judge wrote.

The case is McReynolds et al. vs. Merrill Lynch & Co. et al., U.S. District Court, Northern District of Illinois, No. 08-06105.