Merrill Lynch settles discrimination lawsuit--but only after the suit was given class action status by a judge

Another story about Merrill Lynch's corporate culture was also in the news recently. The two stories seem to have a common element: people at Merrill Lynch tend to undermine each other.

Merrill Lynch settles discrimination lawsuit
Wall Street brokerage to pay $160 million to hundreds of black financial advisers.
Shelley DuBois
The (Nashville) Tennessean
August 29, 2013

For eight years, Nashville executive George McReynolds has been the face of a fight against racial bias at Merrill Lynch. On Wednesday, the company announced it would pay $160 million to settle a class-action lawsuit that was filed in 2005.

If approved by a federal judge in Chicago as expected, the payout by Merrill Lynch to around 1,200 plaintiffs would be one of the largest ever in a racial discrimination case, Chicago-based attorney Suzanne E. Bish said.

Bank of America-owned Merrill Lynch — one of the world's largest brokerages with more than 15,000 financial advisers — issued a statement Wednesday saying only, "We're not at this point commenting on the existence of the settlement nor the status of a settlement."

McReynolds, 68, has worked for Merrill Lynch's Nashville office since 1983. He still works there, even after filing the lawsuit in 2005.

According to his lawsuit, the company culture was "toxic" for African Americans. In 2005, only 700 out of its 14,000 financial advisers were African Americans. McReynolds was one of only two black brokers in Tennessee when he was hired in 1983. The Nashville branch didn't hire a second black employee until 1987.

Beyond its lack of diversity, Merrill Lynch would impede the careers of African-American employees it hired, the lawsuit claimed.

McReynolds' attorney, Suzanne Bish, noted that the settlement coincides with the 50th anniversary of Martin Luther King Jr.'s "I Have a Dream Speech."

"(McReynolds) and his wife are really amazing people who acknowledge that they are where they are because there was a struggle before them, and (they) think it's incumbent upon them to make things better for the next generation," Bish said.

Bish said the settlement should force changes beyond the company being singled out as the defendant in the eight-year-old lawsuit.

"They are leaders on Wall Street," she said. "And increasing opportunities for African-Americans at Merrill Lynch should spill over to the rest of Wall Street."

Plaintiffs claimed discrimination pervaded Merrill Lynch, at least partly because the company employed relatively few African-Americans overall. In a 2009 plaintiffs' filing, they contended that fewer than 2% of the brokers at Merrill Lynch were black.

"Far from being a colorblind meritocracy, race permeates policy and practice in a way that creates substantial obstacles to equal employment opportunity for Merrill Lynch's African-American employees," William T. Bielby, a professor of sociology, said in the filing.

Merrill Lynch sometimes relied on stereotypes, the filing also asserted, once allegedly suggesting managers encourage black brokers to "learn to play golf or other activities designed to learn how business gets done in manners (they) might not be familiar with."

Merrill Lynch prevented black brokers from working with high-profile clients, the suit alleged. It also promoted a companywide policy that encouraged associates to work together on certain cases, and blacks were generally excluded from these beneficial partnerships, the lawsuit said. Finally, after creating an atmosphere that prevented the success of African-American financial advisers, executives at Merrill Lynch would allegedly publicly badmouth the performance of minority employees, the suit alleged.

Robert Gettleman, the U.S. district judge overseeing the case in Chicago, had denied the suit class-action status. But the Court of Appeals for the Seventh Circuit in Chicago granted the status in 2012 — reviving the case and vastly extending its reach.

Gettleman must formally approve the deal, a process that could take months. A status hearing in the case is scheduled for Sept. 3.

Contributing: The Associated Press

Can toxic workplace cultures at schools and banks be deadly? Castle Park Elementary; Moritz Erhardt at Bank of America

Castle Park Elementary, Chula Vista California
UPDATE: Here is another story about Merrill Lynch workplace culture that has popped up in the news. Former intern Polly Courtney: "It wasn't just a culture of long hours and hard work; it was more a culture of desperately trying to impress, with 'face time' – pretending to be hard at work even when you were done for the night – and backstabbing – taking credit for a job well done, blaming others for problems – both commonplace. Ultimately, the money and perks could never make up for the exhaustion or the lack of control we all had over our lives..."

This reminds me of some of the teachers lounges in Chula Vista Elementary School District, where I observed a "culture of desperately trying to impress...pretending to be hard at work" even when you were sitting in the teachers lounge playing politics before school and at every break – "and backstabbing – taking credit for a job well done, blaming others for problems – both commonplace."

I would rarely see the teachers who called the shots working late or on weekends.

But I did see the Castle Park Elementary principal at lunch time during the 1999-2000 school year kneeling next to the seated J.H. (a teacher who actually put a crown on her own head at one assembly). The principal was asking J.H. what to say at the staff meeting about the Comer Program. J.H. told her superior exactly what to say to turn the "all-stakeholders-have-a-voice" Comer Program, for which our school paid $20,000 for training, into a tool for the politically powerful teachers at the school to exert control over every decision. These teachers even overturned a decision NOT to have the Kingdoms Program. The teachers reached the decision by a vote of all teachers. The controlling teachers clique cherry-picked parents and teachers to form an illegally constituted School Site Council (yes, there is a law that specifies how the council should be constituted), which rubber-stamped their demands. It was at a Kingdoms assembly that J.H. wore her crown.

I myself conducted the voting about Kingdoms, and I had the ballots in a box in my classroom, but the ballots disappeared after J. H. and her acolyte L. W. made a concerted effort to get rid of me. Someone actually went to the trouble of searching every box in my room to find the ballots and remove them. I have wondered recently if the culture of advancing oneself through sabotage of coworkers, which reached a remarkable intensity at Castle Park Elementary, might have transferred to Allen School along with several Castle Park teachers, and claimed the life of teacher Teri Coffey this past June. Peggy (AKA Peg, then Margaret) Myers was one of them. She is now in disrepute after many shenanigans at Castle Park and Chula Vista Educators CVE).

The disappearing ballots remind me of A Tale of Two Cheaters, a recent story about voting fraud at Los Alamitos High School when Superintendents Rudy Castruita and Tom Anthony headed the school.



Bank of America reviews long-hours culture after intern's death
Moritz Erhardt, who was 'tipped for greatness' was found dead in shower after working solidly for 72 hours at Merrill Lynch
The Guardian
23 August 2013

Bank of America said it would form a working group to look at its office culture, especially the hours worked by younger staff.

Bank of America Merrill Lynch will review its working practices and culture of long hours following the death of a German intern last week, who colleagues said had pulled three all-nighters in a row before being discovered by emergency services.

One of the world's largest banks issued a statement on Friday afternoon expressing shock at the death of 21-year-old Moritz Erhardt, who was working in Merrill Lynch's investment banking division, and announced a review of working practices with a special focus on junior members of staff.

Erhardt, from south-west Germany, was found dead in a shower cubicle at his temporary accommodation in east London last Thursday evening.

The death of the "dedicated" student sent shockwaves through the world of global finance, as reports of his alleged extreme working habits sparked debate about the culture of punishing hours in some high-profile financial divisions.

A Bank of America statement said: "We are deeply shocked and saddened by the news of Moritz Erhardt's death. Moritz Erhardt was popular amongst his peers and was a highly diligent intern at our company with a bright future.

"Our immediate priority is to do everything we can to continue to support the Erhardt family, our interns and impacted employees at this extremely difficult time. We have also convened a formal senior working group to consider the facts as they become known, to review all aspects of this tragedy, to listen to employees at all levels and to help us learn from them."

A spokesman from the bank said the panel would review "all aspects of working practices with a particular focus on our junior population". He added: "We're going to look at everything."

He said it was too early to say how long the panel would take to complete the study but it would involve very senior members at the multinational bank who would have the capability to bring in third parties for extra scrutiny.

"If the committee decides it wants some additional expertise then they can go and hire it," the spokesman said. "We will look at hard factual evidence. We want a lot of employee feedback and we're going into this with no preconceptions as to what the outcome will be."

The exact circumstances surrounding Erhardt's death are yet to be officially determined. The coroner's court at Poplar told the Guardian that no decision had yet been taken as to whether an inquest would go ahead. A toxicology report as part of the autopsy conducted by Prof Petter Vanezis, was yet to be filed.

A fellow intern at the bank described the aspiring student as a "superstar", adding: "He worked very hard and was very focused. We typically work 15 hours a day or more and you would not find a harder worker than him." He told the Evening Standard: "He seemed a lovely guy and was very popular with everyone. He was tipped for greatness."

According to his biography on the social media platform Seelio, Erhardt said he was naturally inquisitive and had previously stated that he'd undertaken work experience at Morgan Stanley, and Deutsche Bank's corporate finance division.

Polly Courtney, author of Golden Handcuffs and an intern at Merrill Lynch in 2001 before its merger with Bank of America, said the culture of punishingly long hours was endemic. "During my internship, all-nighters were like a rite of passage. They were discussed among us in the Merrill Lynch canteen each night with an outward sense of loathing, but tinged with pride. You weren't seen as a 'proper' analyst until you'd worked through the night.

"It wasn't just a culture of long hours and hard work; it was more a culture of desperately trying to impress, with 'face time' – pretending to be hard at work even when you were done for the night – and backstabbing – taking credit for a job well done, blaming others for problems – both commonplace.

"Ultimately, the money and perks could never make up for the exhaustion or the lack of control we all had over our lives, but it took most of us a few years to realise this. Looking back, the money was just an anaesthetic."