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For the half dozen (current and former) JPMorgan advisers brave enough to file their race discrimination employment case, and the many more current and future employees, the recently announced settlement is a big win.
JPMorgan agreed to pay over $19 million in damages, as well as devote over $4 million for improving anti-bias training, and recruiting as well as mentoring for black employees. The case against JPMorgan alleged both intentional and systemic race discrimination based on the disparate impact of the company's policies on black employees.
The Cost of Injustice
The case alleged that the bank systematically discriminated against black financial advisers by steering worse business their way, and denying black advisers assignments to the more lucrative locations, essentially stifling income and opportunities to advance.
JPMorgan isn't alone in facing employment discrimination claims like these. Nor are they alone in settling these claims, though they did do better than their competitors. As reported by CNN, Merrill Lynch settled a similar case in 2013, WellsFargo also did in 2016, and notably, JPMorgan is getting out for a less than both. Wells Fargo paid over $35 million, while Merrill Lynch put up $160 million.
The financial industry hasn't just been facing lawsuits over race discrimination; at the same time, it has been losing diversity. JPMorgan and other major Wall Street employers have reported shrinking diversity in recent years.
Many employers focus on hiring diverse staffs, but then fail to promote equally, or provide equal opportunities.
Unfortunately, particularly for large employers, these failures are often the result of management level employees failing to properly apply policies, coupled with a failure to supervise, or correct, mistakes by management. And while the compensatory damages for a failure to promote claim may not be as bad as a wrongful termination, the legal costs to defend the case and reputational harm are just as bad.