Brokerage firm Merrill Lynch has agreed to pay $160 million to settle claims of racial discrimination from 1,200 current and former brokers. Seattle-based KIRO 7 reports that if the trial judge approves the settlement, it will be one of the largest settlements reached in a workplace racial discrimination case.
In this case, the plaintiffs were 1,200 African-American brokers who claim that they were the victims of racial discrimination. One of the plaintiffs’ allegations was that they were directed away from the most profitable accounts. Because the brokers’ compensation was based on performance and production, they earned less than their white coworkers who landed the lucrative business. The 1,200 brokers in the lawsuit claimed that their salaries averaged 43 percent less than those of their white coworkers.
The plaintiffs also claimed that Merrill Lynch had an atmosphere of discrimination, based in part on the fact that the company employed very few African-American brokers. According to the plaintiffs, African Americans made up less than two percent of Merrill Lynch’s employees. They also alleged that the company acted based on stereotypes, such as telling African-American brokers to learn how to do business through activities that might not be familiar to them, such as playing golf.
Merrill Lynch has denied the discrimination charges and has maintained that its compensation system is based on production and not on race. Settling with the plaintiffs does not mean that Merrill Lynch has admitted to their allegations.
Both Washington and federal law prohibit workplace discrimination based on race. Title VII of the federal Civil Rights Act of 1964 and the Washington Law Against Discrimination forbids employers from discriminating against employees on the basis of race, including discrimination in the terms or conditions of employment such as compensation or work assignments. The laws also prohibit employers from making employment decisions based on racial stereotypes or other assumptions based on race.
In some instances, employers may not even realize that they are discriminating on the basis of race. For example, the discrimination may be the result of an employer’s unconscious biases, as opposed to an active desire to discriminate based on race. However, even if discrimination is not intentional, it is still unlawful.
In this case, if Merrill Lynch had operated in a way that steered African-American brokers away from the most profitable accounts, that might be discrimination in the terms and conditions of employment. Telling African-American brokers to learn how to play golf and assuming that they would be unfamiliar with that activity is an example of stereotyped thinking that might amount to unlawful discrimination.
No matter what form it takes, workplace discrimination is unlawful. If you believe that you or someone you know has been the victim of discrimination, an employment lawyer can help you understand your options.