NEW YORK, Sept 8 Former Merrill Lynch advisers
who were fired after Bank of America merged with the brokerage
in 2008 won back some of the deferred compensation on which they
had missed out, according to a settlement filed this week in a
North Carolina district court.
Bank of America agreed to pay $12.8 million to settle claims
made by more than 270 former employees that the bank failed to
follow proper procedures after terminating them. The
ex-employees held that the procedures would have allowed them to
argue they deserved to leave the firm with some of their
deferred compensation that was not yet paid out.
Many Wall Street brokerages offer bonuses and other
compensation in the form of deferred cash, seeing it as a way to
delay immediate payouts and to lock in employees who might be
tempted to jump to rival firms.
A Bank of America spokesman declined to comment. As part of
the settlement, the bank and Merrill Lynch did not admit or
concede to any of the allegations made by the former advisers.
The settlement amounts will total nearly $47,000 for each
former employee. The lawyer who represented the former
employees, Michael Taaffe, called it a significant win for
brokers' protection in an era when mergers are common.
"If they were terminated for cause, the bank had to allow
them opportunity to present their side of the story to make sure
that the termination was appropriate and not because the bank
wanted to keep their deferred compensation," said Taaffe, a
partner at Shumaker, Loop & Kendrick in Florida.
(Reporting by Elizabeth Dilts; Editing by Matthew Lewis)