The lawsuit, filed last November in federal court in Chicago and which seeks class-action status, accuses Merrill Lynch of systematically discriminating against African-American brokers in hiring, promotion and compensation, according to Reuters.
The lawsuit, originally filed on behalf of financial advisor George McReynolds, accuses the company of practices such as steering African-Americans into clerical positions, diverting accounts to white brokers and creating a hostile work environment. It seeks compensatory and punitive damages.
“Based on what has happened to date, our clients are through talking to Merrill Lynch,” Mary Stowell, a partner at the law firm that represents McReynolds, told Reuters.
In an emailed statement, Robert McCann, president of Merrill Lynch’s global private client group, said, “I am both saddened and disappointed to confirm that we have reached an impasse.” He also said the company offered the plaintiffs a “fair and appropriate” financial settlement, but the sides remain “far apart.”
McCann separately announced in an internal company memo the creation of an Office of Diversity, at the suggestion of some African-American brokers. The office will design and develop diversity programs, monitor progress and oversee employee disputes.