By Jonathan Stempel
NEW YORK, Oct 30 (Reuters) – Bank of America was sued by a fired financial adviser who accused the second-largest US bank of backing out of its commitment in a 2013 racial bias settlement not to require employees to arbitrate discrimination claims.
In a complaint filed late Thursday in Manhattan federal court, Katherine Mackey challenged a November 2024 policy that purportedly required Bank of America and Merrill Lynch employees to accept mandatory arbitration through JAMS for many claims, including discrimination and harassment, and “forever waive” their right to sue in court or pursue class actions.
Mackey said the policy negated Merrill Lynch’s promises in its $160 million settlement in August 2013 with hundreds of Black brokers who alleged bias in pay, promotions and how large accounts were allocated.
Many businesses prefer arbitration to litigation because arbitration can remain confidential, make gathering evidence more difficult, and cost less. They also prefer individual cases to class actions because recoveries can be lower, and bringing individual claims may be prohibitively costly.
“Congress and the Supreme Court have long encouraged the use of arbitration to resolve employment disputes,” a Bank of America spokesperson said. “Arbitration policies using JAMS as the forum for arbitration are routinely upheld in court, as has this one. We look forward to vigorously defending all aspects of this case.”
According to the complaint, Mackey joined a Merrill Lynch program for aspiring financial advisers in 2023, when she was 65, but younger male colleagues and supervisors subjected her to discrimination and harassment and starved her of resources because of her gender and age.
Mackey said she missed her production goals and was given until the summer of 2025 to catch up, but the deadline was accelerated and she was fired in February 2025. She wants to void Bank of America’s mandatory arbitration policy so she can move her claims to federal court from arbitration, where she filed as a precaution.
Linda Friedman, a Chicago lawyer who represented the brokers in the 2013 settlement, represents Mackey. Her office did not immediately respond on Friday to requests for comment. JAMS was once known as Judicial Arbitration and Mediation Services.
(Reporting by Jonathan Stempel in New York; Editing by Chizu Nomiyama )
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