Black financial advisors who have been treated differently by their employers on account of their race.
A number of lawsuits have been filed in recent years alleging that financial services companies discriminate against black financial advisors.
What Compensation Could I Recover?
By filing a discrimination lawsuit, you may be eligible to receive compensation for wrongfully denied salary, commissions and bonuses.
Can I Be Fired for Filing a Claim?
Should you decide to file a discrimination lawsuit, it is illegal for your employer to retaliate against you.
Although Congress passed the Civil Rights Act in 1964 prohibiting race discrimination in employment, the allegations contained in several high-profile class action lawsuits against investment firms suggest that acts of racism still occur in the workplace.
If you are a black financial advisor or securities industry professional and have been treated differently on account of your race, you may be able to file a lawsuit against your employer seeking compensation for your injuries. Attorneys are investigating claims of discrimination against several of the country’s largest financial corporations, including, but not limited to:
AIG Financial Advisors
Bank of America (and its subsidiaries Merrill Lynch and U.S. Trust)
Bank of New York Mellon
Deutsche Bank Alex Brown
RBC Wealth Management
UBS Financial Services
While the decision to sue your employer is never easy, particularly if you have worked for your company for a long time, an attorney can help you determine whether you have a viable claim for race discrimination under federal, state, or local laws.
Merrill Lynch Race Discrimination Class Action Lawsuit
In 2013, Merrill Lynch agreed to pay $160 million to settle allegations that it systemically discriminated against its African-American financial advisors. The class action lawsuit was filed by George McReynolds, a financial advisor in the Nashville, Tennessee office of Merrill Lynch and alleged that the financial services firm engaged in “systemic and pervasive racial discrimination.” The lawsuit further alleged that white financial advisors made approximately 43% more on average than their African-American counterparts.
Mr. McReynolds had worked in the Nashville office of Merrill Lynch since 1983 and continued to work there even after filing the lawsuit in 2005. Mr. McReynolds told the press that he was inspired to file his lawsuit after reading that an arbitration panel in 2004 ruled that Merrill Lynch had systemically discriminated against female stockbrokers and awarded $2.2 million to a female employee who was discriminated against on account of her gender.
As reported by Bloomberg, the class action lawsuit alleged that senior managers at Merrill Lynch systematically directed the most profitable business to the company’s white employees. The brokers at Merrill Lynch formed teams that shared customers to boost commissions for each team member. According to the lawsuit, African-American financial advisors were purposefully excluded from the most profitable teams.
Experts hired by the plaintiffs’ attorneys testified that on average the brokerage firm gave more accounts and larger accounts to white trainees. The experts also found that African-American brokers were far less likely to be asked to join teams than white brokers. According to USA Today, William T. Biebly, an expert witness for the plaintiffs and a professor of sociology stated that, “Far from being a colorblind meritocracy, race permeates policy and practice in a way that creates substantial obstacles to equal employment opportunity for Merrill Lynch’s African American employees.” In response to the lawsuit, Merrill Lynch spent more than $12 million to hire eight experts who argued that society was prejudiced, not Merrill Lynch.
On December 6, 2013, the Honorable Robert W. Gettleman issued an order approving the $160 million settlement. Under the terms of the settlement, Merrill Lynch will be required to create a council of black employees to advise executives on how to improve the firm’s culture.
The $160 million settlement is the largest racial discrimination settlement ever and will be paid out to 1,400 African-American investment advisors who worked at the firm from mid-2001 through 2013.
Financial Planners File Race Discrimination Class Action Against UBS Financial Services
As reported by NBC News, African-American financial planners formerly employed by UBS Financial Services in its Largo, Maryland office filed a racial discrimination lawsuit against the company.
Known within UBS as the “Diversity Office,” the Largo, Maryland location employed more African-American brokers than any other UBS branch office in the United States. According to the lawsuit, the brokers in the Largo office consistently received less support staff, training and resources than that which was provided to similarly-situated offices staffed primarily by Caucasian stockbrokers. The brokers in the so-called “diversity office” were also allegedly excluded from promotional events, marketing strategy sessions and weekly teleconference calls with brokers from other UBS offices. UBS eventually closed the office and some of the brokers were dismissed, while others were allowed to transfer to UBS’s Washington, D.C. office.
The African-American financial planners that transferred to the company’s DC office allegedly continued to experience acts of racial discrimination. For example, two of the plaintiffs in the lawsuit were told that they would have to go to the back of the lunch line at mid-day office functions under the pretense that it was an industry practice that the “higher producing” brokers had first choice at the luncheon table, the suit claims. In addition, the office allegedly held segregated weekly broker meetings: one meeting for white brokers and one meeting for black brokers. The lawsuit also alleged that UBS supervisors and brokers used racial epithets and slurs to describe the African-American clerical staff. The employees who uttered these slurs and epithets were not disciplined by UBS even though members of the company’s management knew what was being said, according to the lawsuit.
Illegal Race Discrimination Against African-American Financial Planners
It is illegal for a company to treat its employees differently on account of race. Federal law recognizes two types of race discrimination:
Disparate Treatment – Disparate treatment involves an intentional act that discriminates against an individual based on his or her race.
Disparate Impact – Disparate impact lawsuits involve claims that the employer’s seemingly neutral policies or procedures have a negative impact on members of a particular race.
It is illegal for an employer to retaliate in any way against an employee who has filed a lawsuit alleging racial discrimination. Moreover, an employer cannot take retaliatory action against an employee who has filed an internal complaint regarding discrimination or who has participated in an investigation regarding allegations of racial discrimination.
Hostile Work Environment Harassment
Hostile work environment harassment occurs when an individual is subjected to unwelcome conduct based on membership in a protected group. Offensive conduct includes:
Offensive verbal or written comments
Threatening, intimidating or hostile acts that relate to race
Discrimination and harassment can still occur when the victim and the person who inflicted the discrimination are the same race or color.
Harassment is a type of disparate treatment involving verbal or physical conduct that shows hostility or aversion toward an individual because of his or her race and that:
Has the purpose or effect of creating an intimidating or hostile or offensive work environment,
Has the purpose or effect of unreasonably interfering with an individual’s work performance, or
Otherwise adversely affects an individual’s employment opportunities.
Examples of Race Discrimination Against Financial Advisors
Common examples of discrimination in the workplace include:
Improper screening or questions during the hiring process
Failure to promote
Creating a hostile work environment through racial harassment
Unequal levels of compensation, including bonuses and commissions
Uneven disciplinary actions and uneven enforcement of rules
Discriminating against an employee because of his or her marriage or association with people of a different race
Segregating employees based on race
Demeaning jokes about a person’s racial or ethnic background
Racial preference in layoffs
Unequal work conditions, including assigning less desirable tasks to African-American financial advisors
Uneven implementation of rules
Verbal harassment by supervisors, co-workers
What Types of Damages Are Available in a Race Discrimination Lawsuit?
The purpose of a race discrimination lawsuit is to put the victim in the same position that he or she would have been if the discrimination had never occurred. The type of relief awarded by a court or obtained through a settlement will depend on the discriminatory behavior and its effect on the victim. For example, if an employee is fired for a discriminatory reason, a judge may order that the employer reinstate the worker and award back pay for any income that was lost while the employee was not working. The employer may also be required to stop any discriminatory practices and take appropriate measures to prevent discrimination from occurring in the future.
Damages available in a race discrimination lawsuit include:
Out-of-pocket expenses caused by the discrimination
Emotional distress and suffering, mental anguish, inconvenience or loss of enjoyment of life
Furthermore, you may be able to recover any commissions, bonuses or benefits that were wrongfully denied as a result of race discrimination. In addition, if you were denied a promotion on account of your race, the judge may issue an order requiring your employer to grant the promotion.