Sometimes workplace discrimination is not obvious or intentional. In some cases, discrimination results from a seemingly neutral policy that, in fact, serves to discriminate a class of people based on their race, gender, or other characteristics. Because such policies can harm all members of a protected class, employees can turn to class actions to challenge discriminatory policies together.

Class actions are invaluable legal tools because when a group of employees join together to protest a common policy, it can force an employer to take notice. In addition, employees trying to show a policy affects members of a certain group differently can show this effect best with information about the entire group. Finally, employees often fear retaliation when they are the only person speaking up about discrimination; class actions harness the strength in numbers, making them a powerful way to challenge discriminatory policies.

A recent class of African-American employees fighting back against unfair policies at Merrill Lynch points the way for employees seeking to challenge discrimination in court. These employees successfully showed some of Merrill Lynch’s seemingly neutral policies could have a harmful impact on all African-American brokers.

McReynolds v. Merrill Lynch – An Example of a Class Action Discrimination Lawsuit

In McReynolds v. Merrill Lynch, a group of African-American brokers brought a class action lawsuit alleging Merrill Lynch’s policy for forming internal teams was racially discriminatory. At Merrill Lynch, brokers were allowed to form “teams” to share clients. Merrill Lynch’s policy let individual brokers form these teams on their own; once a team was formed, the team could decide whether they wanted to admit a new member. Membership on a team could affect a broker’s performance, pay, and promotions.

The problem with this policy? Plaintiffs said it aggravated racial discrimination. Since there were no criteria for how team members were selected, brokers tended to select team members of the same racial group. So even though there was no intentional discrimination by management, allowing the brokers to choose their own teams enabled racial discrimination by individuals.

The Seventh Circuit allowed the African-American brokers to bring this lawsuit as a class. The court observed how this teaming policy could result in racial discrimination that harmed the brokers:

If as a result of racial preference at the team level black brokers employed by Merrill Lynch find it hard to join teams, or at least good teams, and as a result don’t generate as much revenue or attract and retain as many clients as white brokers do, then they will not do well in the competition for account[s]…either; and a kind of vicious cycle will set in.

The court decided that whether the “incremental causal effect” of the company’s teaming policy had a discriminatory impact could best be decided on a class-wide basis. Judge Posner made clear even though there was no evidence Merrill Lynch purposefully discriminated against African American brokers, if the teaming policy had a discriminatory impact, it may still be a violation of the law, and one that could be considered on a class-wide basis.

McReynolds v. Merrill Lynch settled in 2013. Merrill Lynch agreed to make some policy changes to address these issues, and to pay out settlement awards to the class of African-American brokers.

Recent Cases Challenging Discriminatory Policies in the Workplace

There are other groups of employees challenging discriminatory policies who have sued as a class since the McReynolds decision. In Ellis v. Costco, a group of female employees claimed Costco’s promotions procedures had a discriminatory impact on women. Costco’s policy was to promote from within, and to have regional and corporate officers involved closely in the selection process for General and Assistant General Manager positions. The court determined class certification was appropriate in this case because the class showed both a uniform policy and evidence of class-wide gender disparities in promotions. This case was settled as of May 2014. Costco agreed to make changes to its promotion practices as part of the settlement.

Class Actions Allow Employees to Challenge Discrimination Together

Why do these cases matter? Policies like the ones at Merrill Lynch and Costco may seem harmless, but they can have the effect of discriminating against employees based on race, gender, family status, sexuality, or other characteristics. Class actions are one way to force employers to change discriminatory policies by allowing employees to band together. By sharing the burden of fighting back against an employer’s policies, and joining forces to present evidence together, a group of employees can make a difference through class actions.

If you believe your employer’s policies are discriminatory, contact the attorneys at Hawks Quindel S.C. for a free consultation at (608) 257-0040.

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