Chase Tower, Chicago | By Ken Lund from Reno, Nevada, USA (Chase Tower, Chicago, Illinois) [CC BY-SA 2.0 (https://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons
JP Morgan Chase Bank has agreed to pay more than $19.5 million to settle a class action suit brought in Chicago federal court by several of its employees, who alleged the banking giant assigned its black and African-American financial advisors to less profitable locations and denied them other opportunities to get ahead, because of their race.
Past and current Chase financial advisors Jerome Senegal, Erika Williams, Brent Griffin, Amanda Jason, Kellie Farrish and Irvin Nash filed for a class-action Aug. 31 against Chase, which is the largest bank in America and one of the largest in the world. Chase is headquartered in New York City, operating more than 5,000 branches in the U.S.
Of the six plaintiffs, five worked for Chase at various points from 2007-2017; the sixth plaintiff continues with Chase, having been hired in 2011. The plaintiffs have worked at Chase facilities in Chicago, Texas, Wisconsin, New York, Kentucky and California.
The suit alleged Chase assigned plaintiffs and other black financial advisors like them, to “less lucrative banks and territories,” denying them “resources, teaming opportunities, and business opportunities, including lucrative client accounts,” because of their race. This alleged discrimination toward blacks was “company-wide,” contended plaintiffs.
As an example, Senegal said in his case the bank “stripped” him of his two best branches and reassigned those to whites, then gave Senegal three branches with a much higher concentration of lower-income African Americans and other minorities. Some of these branch facilities required “heightened physical security,” including bulletproof teller windows, Senegal said.
The alleged discrimination did not stop there. Senegal claimed Chase withheld from him leads, referrals and various sales support, and, despite his productivity and 25 years’ experience, refused to promote him. Senegal alleged his complaints were ignored and resulted in increased hostility. In the end, Senegal was fired, he said.
According to court papers, plaintiffs complained to the U. S. Equal Employment Opportunity Commission, then prepared a lawsuit and gave a draft of the suit to Chase, to see if a settlement could be arranged. Negotiations began in May 2017 and with help from a retired judge as mediator, an agreement was reached. As a consequence, the suit and preliminary settlement were filed together on Aug. 31 in Chicago federal court.
District Judge Manish Shah has been asked to approve the proposed settlement.
The proposal calls for Chase to revise its policies and practices, particularly when it comes to assigning advisors. Diversity training will be implemented, more blacks will be recruited and Chase will spend at least $1.5 million on diversity programs and initiatives. The $1.5 million will come from a $4.5 million diversity and reserve fund Chase is to set up.
Chase will also establish a $19.5 million settlement fund.
From the settlement fund, each of the six plaintiffs will be paid $150,000 in addition to their cut as members of the class. There are at least 247 qualifying financial advisors, according to court papers. To qualify as members, these advisors will have to have worked for Chase from April 13, 2013 to whatever date on which the preliminary settlement is approved.
Plaintiffs’ attorneys will collect $5.5 million, plus reimbursement of their costs in pursuing the case.
Plaintiffs are represented by the Chicago firm of Stowell & Friedman.
JP Morgan Chase Bank is defended by the Chicago firm of Morgan, Lewis & Bockius and the New York City firm of Paul, Weiss, Rifkind, Wharton & Garrison.