A former Merrill Lynch trainee is asking a federal courtroom in Manhattan to invalidate a compulsory arbitration settlement that bars workers from bringing class motion lawsuits towards the agency.
Katherine Mackey, a former monetary options advisor in Reston, Virginia, sued Merrill and its Financial institution of America mum or dad on Thursday difficult the obligatory arbitration coverage, which was launched in November 2024 and requires employment disputes to be resolved in non-public arbitration.
Workers have been notified in 2024 that those that remained employed for 30 days have been deemed to have accepted it.
Mackey argued that the coverage is unenforceable as a result of the brokerage’s chosen arbitration discussion board, JAMS, doesn’t present “fundamental due course of safeguards for civil rights.” She additionally referenced a dedication that Merrill made as a part of a landmark $160 million settlement of a race-discrimination class motion in 2013.
Beneath the phrases of that settlement, Merrill agreed to not require arbitration of employment discrimination claims besides via individually negotiated agreements, based on the criticism.
Mackey is represented by Stowell & Friedman, a Chicago-based regulation agency that additionally represented the plaintiffs within the 2013 settlement and has introduced a number of discrimination instances towards main brokerage companies.
Linda Friedman, a founding companion of Stowell & Friedman, stated the lawsuit “is a part of a sequence of instances we shall be submitting to problem obligatory arbitration underneath present guidelines.”
Mackey, who was 65 when she entered Merrill’s coaching program in 2023, alleged that youthful male colleagues and supervisors discriminated towards her by denying her assist and assets and micromanaging her. She wrote that she fell in need of manufacturing targets after being disadvantaged of leads and that Merrill wrongfully terminated her in January 2025 after shortening her deadline for assembly these targets.
The lawsuit additionally questions the impartiality of JAMS arbitration and claims that it favors giant employers. A few of the arbitrators additionally maintain possession stakes in JAMS, resulting in potential conflicts, based on the criticism.
Mackey filed a discrimination cost with the Equal Employment Alternative Fee in November 2025 and obtained discover of a proper to sue in July. She has additionally filed her discrimination claims in arbitration with JAMS however intends to hunt a keep whereas the federal courtroom considers her problem to the arbitration coverage.
A Merrill spokesperson stated that Congress and the Supreme courtroom have “lengthy inspired the usage of arbitration to resolve employment disputes.”
The assertion famous that arbitration insurance policies utilizing JAMS because the discussion board for arbitration are routinely upheld in courtroom, and stated the agency’s coverage had equally been upheld.
“We stay up for vigorously defending all features of this case,” the Merrill assertion concluded.
Though federal legal guidelines permit workers pursuing sexual harassment or assault claims to carry motion in courtroom, related protections don’t exist for race and gender discrimination claims, Friedman wrote in an e-mail.
“It’s time for Congress and the federal courts to impose limitations on obligatory arbitration,” Friedman wrote. “We rejoice our brave shoppers who danger their careers and privateness to reveal these practices and search equity.”
The agency’s 2024 arbitration coverage has beforehand drawn authorized challenges. Two longtime Merrill brokers, Linda Davila and Cathy Bender, sued the agency in November alleging racial discrimination and difficult the coverage. The case was settled confidentially in April 2025.
In 2025, Merrill entered a $19.95 settlement settlement with a category of Black advisors who alleged racial discrimination “relating to their compensation and promotion alternatives,” based on Mackey’s lawsuit.