Bank of America finds itself back in hot water over retention bonuses at its
recently acquired Merrill Lynch unit. This time the furor is being raised by
female employees at the firm who say they received much smaller bonus checks
than their male colleagues.
Jamie Goodman, a financial advisor and 16-year veteran of Merrill Lynch, has
filed a class-action sexual discrimination suit against the brokerage firm and
parent company Bank of America.
The case, filed in late June, asserts that BofA knew of Merrill’s allegedly
discriminatory pay practices yet calculated bonuses based on Merrill data
anyway. The suit seeks unspecified damages.
“When it comes to layoffs or retention bonuses, we’re seeing that the
[negative] impact is much greater on women,” said Shona Glink, partner at law
firm Meites Mulder Mollica & Glink, which is handling Goodman’s class-action
case.
“When these big firms merge, women are being paid less to stay because their
production is lower,” Glink explained. “And why is their production lower?
Because they’ve been discriminated against by not getting the good partnership
opportunities, the big clients or the large territories. It’s a vicious
cycle.”
Gender discrimination claims on Wall Street are nothing new.
Indeed, the National Council of Women’s Organizations established its Women
on Wall Street Project in 2004 to address the issue. But recent years have seen
a lull in such claims. The last time Merrill Lynch faced a high-profile sexual
discrimination suit was in 2004.
Now that thousands of Wall Streeters are losing their jobs, however, such
complaints are on the rise. Gender discrimination claims jumped by nearly 15
percent last year, according to the Equal Employment Opportunity Commission.
The past two months have brought a drastic jump in the number of calls from
women in corporate settings, said Martha Burk, director of the council’s
Corporate Accountability Project. She normally gets three such calls per month,
but so far in July she has already received calls from 13 women.
“And keep in mind that when I’m talking to one woman, she may be calling on
behalf of 10 others,” Burk said. “Informally, we believe that companies think
the recession is going to give them cover against causes of action.”
When Bank of America acquired Merrill Lynch in September, it said it would
pay retention bonuses to Merrill’s financial advisors based on commissions.
The problem is, Goodman charges, “women were excluded from significant income
earning opportunities” at Merrill Lynch, keeping their commissions artificially
low. In addition, she alleges that even the few women who made it into the
high-earning brackets, such as herself, “were disproportionately denied
retention bonuses or received lower bonuses” than their male counterparts.
Bank of America issued a statement saying it would vigorously defend itself,
insisting that bonuses were merit-based and objectively calculated. It said the
bank does not tolerate discrimination.
In recent years, brokerage firms have been fighting gender discrimination
cases with mixed results. In 2004, Merrill fought a $14.6 million sexual
discrimination case brought against the firm’s London office by a female
financial advisor.
The court ruled in favor of the brokerage firm, confirming that her firing
was not gender-based, though it did scold Merrill for a “bullying” environment,
and awarded the former advisor $100,000.
Morgan Stanley didn’t fare as well that year.
The firm settled a sex discrimination case with the EEOC for $54 million a
day before the trial was due to wrap up.
And more recently, in 2006, Dresdner Kleinwort Wasserstein fought a $1.4
billion sex discrimination suit brought by six female bankers, and retaliated
with a countersuit charging the women with “courting publicity” and trying to
“smear the firm’s reputation.” The case was ultimately settled out of court.
Filed by Hilary Potkewitz of Crain’s New
York Business
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