Editor's note: This article has been revised from the initial published version to clarify the amount Edward Jones would pay into the settlement fund, and to clarify facts concerning reimbursement that may be required of new Edward Jones advisers who leave the company shortly after beginning their tenure at the firm.
CHICAGO — A federal judge has signed off on a settlement, which plaintiffs' lawyers valued at $58 million, to end a class action lawsuit from Black financial advisers who accused investment firm Edward Jones of discrimination.
Linda Friedman, Suzanne Bish and George Robot, of Chicago’s Stowell & Friedman, who represented the plaintiffs in the matter, said the award is “the largest employment discrimination settlement achieved in the United States since 2018.” According to court documents Edward Jones will pay $34 million into a common fund to be distributed to 809 class members. Attorneys will be paid $8.5 million from that fund.
In a July 1 motion for attorney’s fees and costs, Stowell & Friedman wrote that its payout amounts to only 25% of the common fund and 14.58% of the overall settlement, “significantly less than the 33 1/3% market rate that the class representatives agreed to at the onset.”
The remaining value in the settlement is attributed to Edward Jones’ agreement to release training cost obligations for any adviser who left the company before 2021, valued at $21 million, while reducing those obligations going forward by $25,000 per adviser, worth $3.18 million. According to the plaintiffs, Edward Jones advisers who leave the firm within three years, under certain circumstances, may be required to reimburse the firm up to $75,000 for its 17-week training program, and the plaintiffs allege Black advisers are more likely to leave the company within that window.
The initial complaint dates to May 2018, though the attorneys said they had been working on the litigation since 2016. U.S. District Judge Andrea Wood signed off on the settlement on July 12.
The plaintiffs alleged Edward Jones discriminated against them by steering them away from seeking clients in affluent neighborhoods and denying access to its Goodknight and Legacy programs, which include a dedicated office and client assistance from a branch office administrator or an established adviser serving as a mentor.
Wayne Bland, who worked for Edward Jones from November 2014 through March 2016, alleged he was forced to work from home, and when he finally got an office with the brokerage firm it was a storage room. He further said “less-experienced and less-tenured white colleagues were given better territories, allowed into the Goodknight and Legacy programs, given offices and received the lucrative accounts reassigned from departing financial advisers.”
Stowell & Friedman took Brand’s claims to the Equal Employment Opportunity Commission in November 2016, through which it interviewed “dozens” of other Edward Jones advisers nationwide. After Bland filed the class complaint, other advisers joined as class representatives. Brand alleged about 94% of Edward Jones advisers are white, while the U.S. Census Bureau says 21% of financial advisers nationwide are nonwhite.
In addition to its financial obligations, Edward Jones will compile and review workplace diversity data, create a financial adviser council and empanel a focus group to advocate for minority advisers. The change, according to a motion in favor of settlement approval, is a three-year commitment to “enhance opportunities for employment, earnings and advancement of African-American financial advisers.”
Class counsel said it reached all but seven potential class members, and there is only one remaining objector. Each class member will receive at least $42,027, which the firm said “is more than twice as large on an absolute basis and nearly twice as generous on a per capita basis as any class action settlement approved by any federal court in any employment discrimination case in 2020.”
Edward Jones has been represented in the action by attorneys James F. Bennett, John J. Rehmann II and Michelle D. Nasser, of the firm of Dowd Bennett, of St. Louis, and attorneys Brian F. Amery, Carole Miller and Stuart D. Roberts, of the firm of Bressler Amery Ross, of Birmingham, Ala.