Suit filed by broker in 2005 lives after appeals court reversal
Apparently, a camel can pass through the eye of a needle.
The 7th U.S. Circuit Court of Appeals in Chicago has granted class action status to a discrimination lawsuit filed in 2005 by broker George McReynolds on behalf of black financial advisers against Merrill Lynch & Co. The decision reverses one made by U.S. District Judge Robert Gettleman last March.
In arguments before the circuit court, lawyers representing Merrill Lynch said the standard for reversing a district court decision on conferring class status was akin to a camel passing through the eye of a needle, according to Linda Friedman, lead counsel for the plaintiffs.
“We told our clients the camel got through,” said Ms. Friedman, founding partner of law firm Stowell & Friedman Ltd. The class could include up to 700 advisers and trainees who had worked at the firm since 2001.
The suit claims that African-American advisers were victims of systematic discrimination at Merrill, leading to smaller incomes and bonuses when the firm was acquired by Bank of America Corp. in 2009.
The decision comes after repeated refusals by both the appellate courts and the Supreme Court to hear the case. Ms. Friedman petitioned the court again after a Supreme Court decision last June in a bias lawsuit filed by women against Walmart Inc. While the Supreme Court threw out that lawsuit, the appeals court in Chicago decided it was reason enough to review the Merrill case.
“This is a wonderful contribution to class action and civil rights law,” said Ms. Friedman.
In a statement emailed to InvestmentNews, Bank of America noted: "We disagree with the ruling and we are still evaluating the decision but believe that the ruling does not fundamentally change our views that the allegations lack merit."
The case will go to trial later this year before Judge Gettleman unless Merrill Lynch decides to settle.
