About a year later to agree In one of the biggest workplace discrimination settlements of 2021, Edward Jones is facing another potential class action lawsuit involving his treatment of financial advisers.
In a lawsuit filed March 9 in federal court in St. Louis, brokers Katie Dixon and Jaime Gaona accuse the company of having “a centralized, company-wide policy and practice of delegating critical compensation decisions to white male financial advisors”. The wealth manager’s “Goodknight Program” practices, in which senior advisers transfer a portion of client assets to less experienced brokers, deny equal access to clients and opportunities for advancement among “female” advisers , non-white and other miscellaneous,'” according to the lawsuit.
He comes as wealth managers take action to follow through on a series of racial equity pledges after the 2020 murder of George Floyd and after Edward Jones settled a discrimination lawsuit filed by black financial advisers for $34 million. The new filing joins numerous workplace discrimination lawsuits in recent years that revolve around the allocation of client accounts in professional services, according to Saba Bireda, a partner at law firm Sanford Heisler Sharp who is co-chair of its practice group on discrimination and harassment.
“That’s what leads to success in these types of businesses is that customer relationship. The ability to be embedded in that customer relationship is really going to determine the success of that employee,” Bireda said. is where we often see a lot of problems.”
One of many cases
As the latest wealth manager to have dealing with high-stakes disasters of discrimination, Edward Jones has made a series of pledges to change its counselor training and advancement practices as part of last year’s massive settlement involving payouts to approximately 800 black councilors. Given the under-representation of women and minorities among advisors in the sector, only 22% of Edward Jones’ 18,300 brokers are women and only 9% are “people of color,” according to the firm’s 2021 annual report. The company aims to increase these amounts to 30% and 15%, respectively, by 2025.
“Edward Jones is committed to creating a place to belong for our associates and customers and to having a positive impact in our communities,” spokeswoman Catherine Stengel said in a statement. “We strongly deny the allegations in the lawsuit, which are inconsistent with our firm’s values. Edward Jones takes its commitments to diversity, equity and inclusion seriously, and we condemn any instances of racism, discrimination or We will continue to listen, learn, take responsibility and act in accordance with our values and our goal of having a positive impact in the lives of its customers, colleagues and communities.
AdvisorHub first reported the new trial against Edward Jones. It follows a case filed last April by a broker named Amanda Daugherty accusing the company of gender discrimination in her management of another counselor who she says sexually harassed her during training. The company has also denied the allegations in this case.
The company has paid the fourth largest settlement of 2021 to all private plaintiffs in employment discrimination class action lawsuits, according to to the latest annual report on workplace disputes by Seyfarth Shaw. Last year, the top 10 settlements across all industries amounted to $323.5 million in combined payments, down 23% from the 2020 total but still a 132% jump from the 2019 figure.
“In terms of employment discrimination class actions from private plaintiffs, employers can expect this area to remain an area of focus for the private plaintiff bar in 2022,” the report said. “Publicity from the Black Lives Matter movement will likely continue to drive litigation, as well as settlement on this front, as companies strive to avoid publicity associated with discrimination claims and avoid incurring anger. social media.”
Dixon, who has worked for Edward Jones since 2017, identifies as pansexual and informed the firm in September 2020 that she was a member of the LGBTQ+ community, the lawsuit states. Gaona, a first-generation Mexican-American, worked for Edward Jones from 2013 until a “constructive discharge” in January, according to the lawsuit. In addition, the two Kansas City-area councilors filed complaints with the U.S. Equal Employment Opportunity Commission.
“The expectation of real and meaningful change has been created and has not been met,” said their lawyer, George Hanson of the Stueve Siegel law firm. “The steps that were taken, we think were really just window dressing, were really marketing rather than real change, because those same issues still persist. We’ve certainly had that confirmed anecdotally by financial advisors.
Gaona and Dixon allege that the company’s Goodknight program sets up white men to succeed with Edward Jones in a way that is not available to aspiring advisers who are women or black, Latino or other minorities. Legacy customers and assets have a significant impact on salary.
“Through the Goodknight program, Edward Jones virtually delegated his compensation decisions for the FA to a group of predominantly white males of primarily American descent or national ancestry,” according to the lawsuit. “This has the predictable result of concentrating assets under management and corresponding compensation in the hands of the next generation of white male AFs to the exclusion of female and more diverse AFs.”
The company’s significant settlement last year with a particular group of black advisers won’t necessarily make it harder for the new case to succeed, according to personal injury and employment discrimination attorney G. Oliver Koppell.
“If they can show that they were excluded from benefits in the same way as black employees or former employees, they can still have a good record,” he said.
After exhausting their possible remedies through the EEOC claims, the plaintiffs intend to seek certification of a class action and class action, according to Hanson. Since the lawsuit alleges systemic gender discrimination under the Equal Pay Act in addition to civil rights claims, plaintiffs can create an “opt-in” group among counselors seeking to join to litigation in addition to a class of “opt-out” brokers during a particular period who must opt out for not being members, say legal experts.
If the court grants “conditional” certification of the class action in the equal pay claim, that means plaintiffs can then proceed to send notice to potential members, Bireda said. Sanford Heisler Sharp.
Amid the so-called racial calculus since the many Black Lives Matter protests of 2020, the focus should be on companies that are transparent in identifying and addressing hiring and promotion disparities. after the many promises made in corporate America, she said.
“We haven’t seen a decrease in the number of people coming to us and alleging they’ve been discriminated against in the workplace. We love being in business, but would also like this not to happen in the workplace and would like to see meaningful changes in the experiences of women and people of color,” Bireda said. “It’s really about gauging the seriousness and commitment of these promises that are being made.”