Sixteen current and former black employees of Merrill Lynch & Co. are seeking to join a lawsuit accusing the largest U.S. retail brokerage of racial discrimination.
The year-old lawsuit, which seeks class-action status, accuses Merrill of systematic and pervasive discrimination against African-American brokers and trainees nationwide in hiring, promotion and compensation.
In an amended complaint filed Monday with the federal court in Chicago, the plaintiffs added claims accusing Merrill of causing disparate harm to blacks, violating Title VII of the Civil Rights Act of 1964.
“The fact that 16 plaintiffs joined the case was not unexpected,” Merrill spokesman Mark Herr said. “They had told us they would be participating. As a broad proposition with regard to the new allegations, we believe that they are wrong, and mischaracterize the firm’s position.”
The plaintiffs seek compensatory and punitive damages.
According to the amended complaint, Merrill perpetuates a hostile, “white male dominated culture” by limiting African-American brokers’ access to wealthy clients and letting bias claims slide.
It also accused Merrill of illegally pandering to “what it presumes are its racist clients,” saying “an employer violates the law when it acquiesces, accedes to or perpetuates perceived customer bias.”
Last week, Chief Executive Stanley O’Neal, who is black, in a deposition said attrition rates are higher and compensation lower among Merrill’s African-American brokers, but that the firm wasn’t at fault, a person close to the matter said.
About 2.3 percent of Merrill’s 15,700 brokers are black, but that percentage exceeds the industry average, a Merrill spokesman said last week.
Last December, Robert McCann, the head of Merrill’s global private client group, told employees the process of attracting and retaining minorities was going slower than he preferred.
The Chicago lawsuit was originally filed by George McReynolds, a financial adviser who joined Merrill in 1983 and worked in Nashville, Tennessee. A hearing to approve amending the complaint and adding the plaintiffs is set for Nov. 14.
Merrill agreed in the late 1990s to pay more than $100 million to resolve claims of sexual discrimination by more than 900 female brokers.
In 1974, it agreed to increase its percentage of African-American brokers to 6.5 percent to settle an Equal Employment Opportunity Commission lawsuit accusing it of refusing to hire women and minorities as brokers.