Edward Jones Agrees to Settle Racial Discrimination Suit for $34 Million
From the Desk of Jim Eccleston at Eccleston Law LLC:
Edward Jones has agreed to pay $34 million to settle a racial discrimination class action suit filed in 2018 on behalf of both current and former Black financial advisors. The advisors brought the lawsuit, alleging that they were discriminated against by the firm's training and account distribution practices.
The settlement agreement covers all African American or Black advisors employed by Edward Jones between May 24, 2014, and December 31, 2020. The class action includes at least 800 class members, according to the settlement documents. The class members could receive payments of around $31,000 net of legal fees and court costs.
The settlement agreement requires St. Louis based Edward Jones to revise its policies for recouping training costs and create an advisory council. The advisory committee must consist of a "diverse cross-section" of brokers at Edward Jones who will consult with senior executives on programs to increase diversity and representation of African American advisors.
A spokesperson from Edward Jones states, " the agreement is in the best interest of Edward Jones and allows the firm to move forward." According to news sources, Edward Jones is committed to creating meaningful increases in diversity among their financial advisors and senior management.
The lawsuit, initially filed by Wayne Bland, said that Edward Jones' practice of recouping training costs when junior advisors departed for other competing firms disproportionately affected Black financial advisors who failed at higher rates because of a lack of equal access opportunities. The suit also criticized Edward Jones's account distribution programs, "Legacy" and "Goodknight." The lawsuit alleged that the programs allowed leads to go primarily to non-diverse advisors.
To address the training program issues, Edward Jones stated it would relinquish all financial advisors terminated before January 1, 2021, for payment of alleged training costs of up to $75,000. Edward Jones also committed to decreasing its maximum training cost recoupment from $75,000 to $50,000. The settlement estimated there was $20 million worth of outstanding training costs that would be deemed forgiven.
Eccleston Law LLC represents financial advisors nationwide. Please contact us to discuss any issues that you may have.
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