Merrill brokers lose appeal in racial bias suit

Court says brokers may recover losses in separate case

A 7th Circuit judge in Chicago has rejected a racial bias suit that black financial advisers who worked at Merrill Lynch & Co. filed over retention bonuses, upholding a lower court’s dismissal of the case. The three-judge panel did say, however, that the brokers could try to recover losses over bonus payouts in a separate suit.

The court found that the company did not pay lower bonuses to black employees than it did to white employees, and said bonus decisions were based on “race-neutral” assessments.

"It is not enough to allege, as the complaint does, that the bonuses incorporated the past discriminatory effects of Merrill Lynch's underlying employment practices," Judge Diane Sykes wrote.

The court went on to say that the plaintiffs may be eligible for “complete relief” in a related case currently pending in the federal district court in Chicago. That case dates back to 2005, when several black brokers at Merrill Lynch claimed the company engaged in systematic bias in hiring, pay and promotions. The suit said Merrill steered its black employees toward clerical positions and offered more lucrative accounts to white brokers. That suit was granted class action status in February.

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