A lack of diversity amid charges of outright racial discrimination continues to haunt the financial industry as well as others in the New York City area. Following similar settlements by Merrill Lynch in 2013 and Wells Fargo in 2016, JP Morgan agreed to a payout of $24 million in response to an allegation that black financial advisors were treated differently than their white counterparts. JP Morgan admitted no liability in announcing the settlement, which brings to conclusion a potential class-action lawsuit.
JP Morgan was apparently aware of this issue prior to the filing of the lawsuit. Its CEO noted in a shareholder letter from 2016 that although the company felt it was doing as good a job as any in the industry at hiring and retaining black employees, it needed to do better. This settlement dramatically underscores that point.
In addition to funds directed to compensate the alleged victims for their losses, part of the settlement is directed toward anti-bias training and recruitment and mentoring of black employees. A spokesman for JP Morgan emphasized the company’s desire to create and maintain an inclusive environment for all of its employees.
A company’s culture, whether intentional or a product of inadvertence or ignorance, is often created from the top down. Although the vast majority of employees work without the benefit of an employment contract and are thereby considered at-will employees, there are limitations as to how an employer can act. Specifically, there are distinct classifications of individuals who are afforded greater protection. Discrimination based on race may trigger both federal and state claims. An employee rights attorney may explain the protections an employee is afforded.