A court appointed panel determined Merrill was responsible for the repeated discrimination due to the firm’s “failure to respond appropriately to hotline complaints and failure to train, counsel or discipline employees who engaged in sexual harassment.” This failure in turn constituted discrimination on the part of the firm with “malice or reckless indifference to the federally protected rights of female employees,” the panel’s decision said, according to a Wall Street Journal report.
In response to the decision, Merrill says steps were taken to address the issues, which includes a change of management at the San Antonio office and improved internal investigative capabilities.
The findings stem from a class-action lawsuit filed in 1997 by Hydie Sumner. Sumner, who worked as a financial consultant from 1991 to 1997, contended she encountered repeated sexual harassment from men in the office, including a superior, as well as discrimination over promotions and salary.
Perhaps more significant for Merrill is the precedent such a finding could set. Of the more than 900 claims filed by women in original 1997 class-action suit, about 40 are still pending.
The Merrill decision is the latest in a string of sexual-harassment suits levied against major Wall Street firm. In December an arbitration panel ordered Salomon Smith Barney to pay $3.2 million to a female stockbroker to settle the highly publicized “boom-boom room” case (See Smith Barney Sex Harassment Case Settles Before Arbitration ). Other suits are still pending including a gender-discrimination lawsuit against Morgan Stanley and Bank of America Corp.