Bank of America agreed on Friday to pay $39 million to women who worked in its Merrill Lynch brokerage operation, another costly settlement of a discrimination case filed by its employees.
The agreement, filed Friday evening in a federal court in Brooklyn, was the second by the nation’s largest bank over 10 days. Last week, Merrill Lynch told a federal judge in Chicago that it would pay $160 million to settle an eight-year-old racial discrimination suit filed on behalf of 700 black brokers.
With the new agreement, Merrill will have paid out nearly half a billion dollars to settle employee discrimination claims over the last 15 years.
The case settled on Friday was originally brought by women who had worked in the brokerage division of Bank of America, but it was amended to include women who were brokers at Merrill Lynch after the bank bought Merrill. The money is expected to be divided among as many as 4,800 current and former employees of the two brokerage operations.
Merrill, which has about 15,000 brokers worldwide, also agreed to change its policies to give women a better chance of succeeding. The firm will bring in an applied organizational psychologist to study some of its policies, particularly how teams of brokers are formed and how they share customers’ accounts, said Rachel Geman, a partner at Lieff Cabraser Heimann & Bernstein and one of the lawyers who represented the plaintiffs.
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Merrill has a long history of litigation over its treatment of women and minority employees. In the 1970s, the firm settled a discrimination suit by consenting to make its work force more diverse but never met that goal.
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In 2010, they sued Bank of America for practices at both the bank and Merrill Lynch. Judy Calibuso, one of the lead plaintiffs, was a longtime broker for the bank and now works for Merrill Lynch. Another lead plaintiff, Julie Moss, said that this settlement will advance our efforts to foster diversity and professional success within the work force. ”
Another lawyer for the plaintiffs, Cara E. Greene, a partner at Outten & Golden, said some issues the women cited had cropped up again on Wall Street after the Cremin case was resolved.
Speaking generally of the industry, there have been changes that have attempted to address the gender disparity that exists, but it hasn’t solved the problem, ” Ms. Greene said. It’s still a well-known secret that women make less than men on Wall Street, and that’s true in the financial advisory world. We think the settlement is a great settlement that increases opportunities for women at Merrill Lynch going forward as financial advisers. “