[ by Melanie Gretchen ] BofA's Merrill Lynch lost a major court ruling relating to charges of 'racial discrimination' against current and former black brokers of the firm.  A federal Court of Appeals ruled that it would permit the 700 or so individual cases to be combined and presented as a single class action lawsuit. This is a major victory for the brokers and equally significant defeat for Bank of America's Merrill Lynch unit.  The decision, which favors some 700 current and former black brokers who are expected to join the class action, comes just 8 months after the U.S. Supreme Court reversed a lower court ruling and denied class action status to charges brought by employees of Wal-Mart Stores. Supreme Court Decision in Wal-Mart Case. A key reason given by the Supreme Court for its decision to deny class action status to the group of Wal-Mart employees was that individual managers' discretion played a big role in career development of employees - and not necessarily the company itself.  Many legal analysts viewed the Supreme Court decision as creating a significant barrier for employees pursuing class-action status in their complaints against employers. But, in the Merrill Lynch case, the 3-judge panel of the 7th U.S. Circuit Court of Appeals in Chicago ruled in favor of the black Merrill brokers, and are permitting them to collectively sue Merrill over alleged discrimination.  The brokers claim that their employer, Merrill Lynch, among other things, kept their pay down and impeded their career growth by directing blacks into clerical positions, redirecting lucrative accounts to white brokers, and producing a hostile work environment. How the Merrill Case Differed From the Wal-Mart Case. Judge Richard Posner, writing for the panel, noted that while individual managers' discretion played a big role in career development of Merrill brokers, the court was convinced that the common issues among the various brokers' cases made it more efficient for the court to handle all the Merrill Lynch broker cases as a group.  Judge Posner provided these additional points in the opinion:

"There is no indication that the corporate level of Merrill Lynch (or its parent, Bank of America) wants to discriminate against black brokers.  Probably it just wants to maximize profits. But in a disparate impact case the presence or absence of discriminatory intent is irrelevant."

Reaction to the Ruling. George McReynolds, a 28-year Merrill veteran in Nashville, TN, who brought the lawsuit in 2005 on behalf of brokers and trainees who had worked in the Global Private Client unit since 1/1/01, said: "I think people from above are directing the managers, and managers are just doing things the way they are directed to do.  I'm confident that things can get better ... It's going to take a little bit of a culture change." He added that he was "tickled to death" by the judgment. The lawyer for the brokers, Linda Friedman of Stowell & Friedman, added to her client's comments: "The Seventh Circuit recognized there is utility to class treatment where the challenge is to the policy and the relief sought is reforms." Bank of America disagrees with the ruling, and still believes the case lacks merit, according to a spokesperson, who added that Bank of America has "progressive workplace practices," and that diversity and inclusion are core values of the bank's culture. Benefit of Class Action Status to Claimants. Class-action cases can yield higher recoveries and lower costs than when plaintiffs sue individually.  Going forward, the Merrill case now will return to the federal district court in Chicago. The case: McReynolds et al v. Merrill Lynch, Pierce, Fenner & Smith Inc, 7th U.S. Circuit Court of Appeals, No. 11-3639. For further details, go to [Reuters, 2/24/12].