Merrill Lynch & Co. and lawyers for eight female brokers who sued the firm for gender discrimination reached a settlement Monday that awards the women $600,000 and abolishes the firm's mandatory arbitration process.
Pending approval from a judge, 2,500 current or former female brokers for the nation's largest securities firm will be able to bring bias claims dating as far back as Jan. 1, 1994, before a new neutral panel beginning in July.
Panel members will be experts in gender bias laws and will be selected from a pool of lawyers for the company and the plaintiffs. Critics say the old panels were too sympathetic to the firm.
"Currently, these employees and virtually every employee on Wall Street are compelled to go through a rather one-sided binding arbitration process that prohibits them from going to court," said Linda Friedman, one of the plaintiff's attorneys.
Merrill Lynch spokeswoman Susan Thomson said the company was planning to change its arbitration process regardless of a settlement.
She said the case would be presented today to U.S. District Judge Ruben Castillo for his approval.
Other terms of the settlement include Merrill Lynch agreeing to more aggressively recruit women and minorities and to provide diversity training at various levels within the firm.
The plaintiffs also agreed to drop charges of sexual harassment at the firm, Thomson said.
The lawsuit was brought in February 1997 by one current and seven former female financial consultants for the New York-based Merrill Lynch, which employs about 14,000 brokers and 55,000 total employees worldwide.
The eight will share the $600,000.