Employment Law Attorneys
The Nation- The Dangers of Working While Black on Wall Street

The Nation- The Dangers of Working While Black on Wall Street

By Mark Carey

The financial industry is notorious for its cutthroat culture, largess incomes and racism.  On June 21, 2021, the publication The Nation issued an alarming article by investigative journalist Susan Antilla using the above caption.  The article explores the many destroyed careers of people of color on Wall Street and the financial firms and industry self-regulatory agencies that cover up overt racism through confidentiality agreements and forced arbitration.

Ms. Antilla wrote “…the industry is vowing to change. In the wake of last summer’s unrest, Merrill parent Bank of America and other giant financial institutions rushed to make commitments to racial justice and in several cases broke an industry-wide silence, releasing statistics that exposed the paucity of Black people and other minorities in the workforces.  Merrill, for instance, revealed in August that 780 of its 17,500 brokers are Black, a figure of 4.5 percent. That’s a 125 percent increase since 1994, when 2 percent of its brokerage force was Black.  But in an industry with sparse Black representation, it is easy to double or even triple a minority group’s numbers. More illuminating is that the Black segment of the firm’s brokers—also known as financial advisors—grew only 2.5 percentage points over those 26 years…”  For comparison purposes, Blacks statistically make up 13.4% of the U.S. population according to the latest Census data.

The article continues in pertinent part, “Whether sincere or motivated by image concerns, Wall Street’s heightened passion for addressing the racism in its midst has opened an important conversation about recruitment, promotion, and pay policies in one of the nations most lucrative businesses. Missing from the dialogue so far, though, are some key questions: When racism does occur, how do firms treat Black employees who complaint? And what happens to Black people when they take their complaints to arbitration or to court?”

Ms. Antilla writes, “Racism exists in every industry, of course. But on Wall Street, where the potential earning power is vast, Black people face formidable barriers. They make up 13 percent of the US workforce, but they occupy only 2.9 percent of the industry’s financial adviser jobs, according to a January report by Cerulli Associates. Those who manage to get jobs can wind up losing them after enduring racist remarks, managers who deny them privileges enjoyed by their white colleagues, and social isolation that is both painful and distracting. The financial industry is a sharp-elbowed business that requires a thick skin to survive, but the brutality aimed at Black people exacts a different kind of toll. Capel and his colleagues gave an example of the day-to-day degradation in their complaint: A Merrill Lynch manager was photographing his brokers for a bulletin board display and suggested to a Black broker that he needn’t have his photo taken. ‘I can find your picture down at the precinct,’ the manager quipped.”

“Today, most major investment banks require employees to agree to arbitration—a policy that the rest of corporate America has admired and copied. Goldman Sachs, UBS, and Edward D. Jones are among those who have fought and won when employees tried to pursue civil rights claims in court. But few have gone to the extremes of Morgan Stanley, which has faced multiple racism complaints by Black former employees. In 2015, the firm sent e-mails to 36,000 workers that required them to respond to the company and opt out of a new mandatory arbitration policy if they wanted to retain the right to sue in court. The message included no hint of time sensitivity or importance in its subject line, and many employees said they didn’t recall receiving it. In the end, more than 30,000 employees failed to opt out, including several Black brokers who would later be forced into private arbitration.”  Our law firm has represented former Morgan Stanley employees who were duped into these “forced arbitration agreements” and have argued in federal court against these now notorious email sham arbitration contracts.  Unfortunately, courts have condoned this behavior in light of prior court decisions.

In 2018, a federal judge in New Jersey granted Morgan Stanley’s motion to compel forced arbitration in the matter of Craig Schmell v. Morgan Stanley & Co, Inc., 3:2017cv13080 [Doc.#35]. “CARE [Convenient Access to Resolutions for Employees] was implemented pursuant to an opt-out system between September and October 2015.  During this period, Defendant sent emails to all employees informing them ‘that the program was mandatory unless they opted out and that their continued employment without opting out constituted acceptance of [the Agreement]…The fact that the email appeared in Plaintiff’s inbox, combined with the expectation that Plaintiff would read his email, is sufficient to indicate that Plaintiff had notice of the Agreement.” The same decision was reached by a federal judge in the Southern District of New York in Lockette v. Morgan Stanley, 1:18cv00876 [Doc.#35].  The Court endorsed the use of the forced arbitration agreement sent to employees via email, even if the employee never opened the email or noticed it was sent to his inbox.  In all of the reported decisions, the forced arbitration emails were mostly sent to Morgan Stanley emails on a Friday evening over a Labor Day weekend, as reported in our own cases and those reported on Court databases.

Glencore, another leading commodities trading firm also uses forced arbitration for all new hires. However, the “trick” forced arbitration agreement was not contained in an email but in small print on the bottom of generic employment application. A federal judge in Connecticut in Murphy v. Glencore LTD, 3:18cv01027, granted Glencore’s motion to compel its’ forced arbitration agreement in a case that we filed during the #metoo movement on behalf of our client, holding, “Murphy further argues that Title VII employment discrimination claims are non-arbitrable as a matter of public policy. She contends that ‘[g]ender discrimination cases need to be decided in the public forum’ to ensure that companies are held accountable. The confidential nature of private arbitration, she says, ‘only helps to cover up the problem’ and does ‘nothing to deter [an employer] from discriminating in the future. Without minimizing the gravity of Plaintiff’s arguments—the subject of passionate and contentious debate for decades across this nation’s courts and legislatures—we are bound by precedent and cannot accept her position.”

For a more in depth discussion on forced arbitration and other issues faced by employees pursuing employment discrimination cases in federal court, I strongly encourage you to read Loser’s Rules by a former federal judge Nancy Gertner. Although the article was written in 2012, I will represent as a practicing litigator in many federal courts across this country for the past twenty-five years, the Loser’s Rules are alive and well.

The Nation article further identifies the dispute resolution programs, a.k.a. forced arbitration tribunals, such as JAMS and FINRA which are the sole judicial remedy for race discrimination employment complaints in the financial industry.  Financial employees cannot go directly to court and present their cases to the public and to a jury.  They must file their cases with FINRA or JAMS under the cloak of confidentiality.  In the absence of confidentiality, we would all discover the rampant discrimination Susan Antilla reveals in her article.  In every forced arbitration case our firm encounters, we seek to file court actions challenging the enforceability of the arbitration agreement AND lay out all the facts of the underlying discrimination claims for public consumption.  Maybe there are other employees who will hear about the case and come forward with similar stories of ridiculous discriminatory behavior.

Ms. Antila reports that “[O]n April 29, FINRA published a notice seeking comment on any aspects of its rules and processes that might create “unintended barriers” to greater diversity in the industry. FINRA “is committed to fostering an inclusive and diverse workplace, and to doing our part (subject to our statutory mandate) in the fight against racism and prejudice within our industry and communities,” its spokesperson said in a statement. Brokerage firms have also shown willingness to change. People of color make up more than one-third of the current class of financial advisors in the training program at Bank of America’s Merrill Lynch, according to spokesman Halldin. And in early June, Goldman Sachs yielded to shareholder pressure and said it would undertake a review to see how forced arbitration impacts its employees. The move inspired optimism that opponents of forced arbitration are making progress in pursuing its demise.”

I offer some closing thoughts for you to consider.  Every employment case filed in any judicial proceeding should and must be made public and not shielded by confidentiality agreements, nondisclosure agreements, and forced arbitration agreements.  These default tactics used by almost all employers, whose owners come from both political camps, only perpetuate inequality and discrimination of all types.  We have reached the crisis stage with respect to forced arbitration and it would take an act of Congress to amend or eliminate the Federal Arbitration Act. The Securities & Exchange Commission in cooperation with FINRA need to modify financial industry regulations to remove confidentiality from arbitration and to require mandatory disclosure of discrimination cases in company public filings.

If you would like more information about this topic, please contact our employment attorneys at Carey & Associates, P.C. at 203-255-4150 or email to info@capclaw.com.

The Nation The Dangers of Working While Black on Wall Street

 

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Podcast: C’mon, Man! Employees Continue to Get Screwed Over

Podcast: C’mon, Man! Employees Continue to Get Screwed Over

Podcast: C’mon, Man! Employees Continue to Get Screwed Over: In this episode of the Employee Survival Guide Mark confronts systemic barriers created by employers that promote inequality of gender, age, race, sex, sexual orientation etc. and protects  bad actors and bad companies from public exposure of their illegal actions and public shaming.   Mark examines the current social equality movement (#metoo and BLM) to find system barriers thrown in their faces of employees by the very employers who publicly denounce sexism and racism.  Employers should be banned from using confidentiality agreements in employment discrimination settlements. We should ban the employment-at will rule because it only promotes biased discrimination in the workplace.  And finally, every case should be made public instead of being forced into the black hole of arbitration.  We need to know how our employers are treating our coworkers and ultimately ourselves.

The Employee Survival Guide is a podcast only for employees. We will share with you all the information your employer does not want you to know about and guide you through various important employment law issues. The goal of the Employee Survival Guide podcast is to provide you with critical insights about your employment and give you the confidence to protect your job and career, especially during difficult times.

YOUR HOST MARK CAREY

The Employee Survival Guide podcast is hosted by seasoned Employment Law Attorney Mark Carey, who has only practiced in the area of Employment Law for the past 25 years.  Mark has seen just about every type of employment dispute there is and has filed several hundred lawsuits in state and federal courts around the country, including class action suits.  He has a no frills and blunt approach to employment issues faced by millions of workers nationwide. Mark endeavors to provide both sides to each and every issue discussed on the podcast so you can make an informed decision.

EMPLOYEE SURVIVAL GUIDE PODCAST IS LIKE NO OTHERS

The Employee Survival Guide podcast is just different than other lawyer podcasts! How?  Mark hates “lawyer speak” used by lawyers and just prefers to talk using normal everyday language understandable to everyone, not just a few.  This podcast is for employees only because no one has considered conveying employment information directly to employees, especially information their employers do not want them to know about.  Mark is not interested in the gross distortion and default systems propagated by all employers, but targets the employers intentions, including discriminatory animus, designed to make employees feel helpless and underrepresented within each company.  Company’s have human resource departments which only serve to protect the employer. You as an employee have nothing!  Well, now you have the Employee Survival Guide to deal with your employer.

Through the use of quick discussions about individual employment law topics, Mark easily provides the immediate insight you need to make important decisions.  Mark also uses dramatizations based on real cases he has litigated to explore important employment issues from the employee’s perspective.  Both forms used in the podcast allow the listener to access employment law issues without all the fluff used by many lawyers.

If you enjoyed this episode of the Employee Survival Guide please like us on FacebookTwitter and LinkedIn.  We would really appreciate if you could leave a review of this podcast on your favorite podcast player such as Apple Podcasts.

Podcast: C’mon, Man! Employees Continue to Get Screwed Over: For more information, please contact Carey & Associates, P.C. at 203-255-4150, www.capclaw.com or email at info@capclaw.com.

The content of this website is provided for information purposes only and does not constitute legal advice nor create an attorney-client relationship.  Carey & Associates, P.C. makes no warranty, express or implied, regarding the accuracy of the information contained on this website or to any website to which it is linked to.

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