September 24, 2013 7:17 pm

BofA told to pay $2.2m in racial discrimination case

A US judge has ordered Bank of America to pay $2.2m to more than 1,100 African-American job seekers in a decades-long racial discrimination case.

Linda Chapman, an administrative judge, ordered the payments to be made in back wages and interest for “race-based hiring discrimination” at the lender’s Charlotte, North Carolina-based business, the US Department of Labor said on Monday.

The case marks the latest discrimination suit involving a major US bank, many of which are still reeling from legal costs linked to much larger financial settlements related to trading losses and the sale of mortgage-backed securities.

The ruling comes after brokerage Merrill Lynch – which was bought by BofA at the height of the financial crisis – agreed to settle a separate $160m class-action race discrimination law suit.

Earlier this month, Merrill reached another $39m settlement with female brokers who alleged they received lower pay and were refused major accounts.

Judge Chapman’s decision grants $964,033 to 1,034 job hopefuls who were rejected in 1993 and $1.2m to 113 people who were not chosen for jobs between 2002 and 2005, according to the ruling. She also ordered the bank to offer jobs, with appropriate seniority, to 10 of the class members, when positions become available.

“Wherever doors of opportunity are unfairly closed to workers, we will be there to open them – no matter how long it takes,” Patricia Shiu, director of the Office of Federal Contract Compliance Programs, said in a statement. “These workers deserve to get the full measure of what is owed to them.”

The case dates back to 1993 when the OFCCP attempted to carry out a compliance review of the then-NationsBank in Charlotte, North Carolina. The bank rejected the review, prompting legal action.

“We are currently reviewing this recommended decision and order,” BofA said. “At Bank of America, diversity and inclusion are part of our culture and core company values. We actively promote an environment where all employees have an opportunity to succeed.”

Judge Chapman said in the ruling: “In this case, there is not a scintilla of evidence to suggest that the bank has taken any action in good faith to prevent future illegal behaviour, and to ensure that any such behaviour is promptly investigated, and if necessary, halted and punished.”

However, she added, “there is no evidence to suggest that the bank is persisting in illegal discriminatory hiring.”

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from and redistribute by email or post to the web.