A class-action race discrimination lawsuit brought by a Merrill Lynch employee has been settled for $160 million. More than 1,200 current and former Merrill Lynch employees could be eligible to take part in the settlement, one of the largest sums obtained from an employer in a race discrimination lawsuit. The lead plaintiff, George McReynolds, an African American broker who has worked for Merrill Lynch for 30 years, sued his employer, saying it had a segregated workforce, including policies that steered black brokers into clerical positions and reassigned their accounts to white workers. At the time McReynolds filed the lawsuit, only 2 percent of the brokers at Merrill Lynch were African American, despite a 30-year-old consent decree Merrill had signed with the U.S. Equal Employment Opportunity Commission requiring the firm to increase its proportion of black brokers to 6.5 percent.
According to the lawsuit, although the Nashville, Tennessee office where McReynolds worked had grown to 65 to 70 brokers, there were never more than three African American brokers at any one time.
Office mangers resisted McReynolds' attempts to recruit and retain diverse candidates and forced him into a partnership with a "white rookie" that was "highly detrimental" to his career, McReynolds alleged in his complaint.
McReynolds suffered a series of early obstacles in bringing the lawsuit. The federal judge in Chicago handling the case denied a motion to certify it as a class action, a ruling that was affirmed by the 7th U.S. Circuit Court of Appeals and the U.S. Supreme Court. The attorneys representing McReynolds tried again after the U.S. Supreme Court's 2011 ruling in Wal-Mart Stores Inc v. Betty Dukes, et al. Though the Court in the Wal-Mart found that the workers bringing a gender discrimination lawsuit against the retailer could not move forward as a class, McReynolds' attorneys saw a chance to differentiate the Merrill Lynch matter and possibly obtain class action certification. Seventh Circuit Judge Richard Posner agreed, citing Wal-Mart v. Dukes in his decision to certify a class of current and former Merrill Lynch brokers. The Supreme Court declined to hear the brokerage's appeal of that decision, leaving Posner's determination intact.