Stanley O’Neal, chairman and CEO of Merrill Lynch, will be deposed on Nov. 1 in New York as part of the discovery phase in a race-discrimination suit filed by one of the firm’s black brokers.
The suit, filed last November by George McReynolds, a 23-year veteran Merrill broker in the firm’s Nashville, Tenn., office, alleges systematic race discrimination and retaliation against African Americans, as well as unequal pay practices and opportunities. (Click here to read “Our Diversity Problem”, Registered Rep’s March cover story about the case and the industry’s long history as a place dominated by white males.)
“He is a witness with relevant information,” says Mary Stowell, one-half of Chicago-based Stowell & Friedman and the plaintiff’s lawyer. O’Neal, who is black, is seen as having unique knowledge of the case and its components. “If we didn’t think he had information we needed, we wouldn’t ask for him—we don’t abuse people’s time,” she said.
The deposition, which will take place in New York at either Merrill Lynch or the offices of O’Neal’s lawyers, is part of the discovery phase, the document and data-collection period of any trial. O’Neal’s selection as a witness is based on his knowledge of compensation structure and account-distribution practices, among other things, says Stowell. That he’s made public statements on the case and had meetings with the plaintiff brokers were also factors. (Not everyone was thrilled with the first meeting.)
Interestingly, the deposition is significant because it affords the plaintiffs an opportunity they might not get at trial. Due to federal rules of civil procedure, if the subpoenaed person lives outside the trial district (in this case, Chicago), the attorney submitting the subpoena cannot ask that person to travel more than 100 miles. The same holds true for depositions, but Merrill apparently agreed to allow O’Neal to be deposed.
The discovery phase of the case will likely end in the spring of next year, at which time the plaintiffs will request that the case be certified as a class action. If it is certified, it will involve more than 700 current and former Merrill Lynch brokers.
McReynolds claimed in the original suit that Merrill had no black brokers in about 25 states, and that for the past several years the great majority of black brokers in Merrill training programs were pushed out due to discriminatory practices. According to Merrill, the firm employs 344 black brokers (out of a total of roughly 15,000) in 35 states.
Mark Herr, head of media relations at Merrill Lynch, had no comment on O’Neal’s impending deposition, but did say the firm is doing a number of things to promote a more ethnically diverse environment. For one, managers have been told that their compensation will be affected by their success or failure to attract a diverse population of financial advisors.
The firm has also created an Office of Diversity and appointed the current chief operating officer of the private client group, Colbert Narcisse—who is black—to run it. Robert McCann, president of global private client, issued a statement in June saying the firm is continuing “to build a culture where everyone has the opportunity to contribute and succeed based on the merits of their work.”
