Bank of America Fined $2.2M for Racial Discrimination

Posted October 2, 2013 in Labor and Employment by

Bank of America sign

Photo: Kati Drisc

A federal judge ordered Bank of America to pay nearly $2.2 million for its racially discriminatory hiring practices in a case that has spanned almost 20 years.

U.S. Department of Labor Judge Linda S. Chapman levied the fine for back wages and interest for “unfair and inconsistent selection criteria resulting in the rejection of qualified African American applicants” at the bank’s Charlotte headquarters.

The unfair hiring practices were first discovered in 1993 during a routine compliance review by the labor department’s Office of Federal Contract Compliance Programs (OFCCP). The OFCCP pursued “conciliation efforts” with Bank of America, but after those failed, the labor department sued the bank in 1997.

About $964,000 will be shared among 1,034 applicants from 1993, and the remaining $1.2 million will go to another group of 113 applicants who were rejected between 2002 and 2005. Bank of America is also required to offer positions to 10 of its wrongfully rejected candidates as openings become available.

 

Two Decades in the Making

In a statement, OFCCP Director Patricia A. Shiu emphasized that while the lawsuit was a long haul, it was worth the marathon effort.

Donna Ballman

Donna Ballman

“Wherever doors of opportunity are unfairly closed to workers, we will be there to open them — no matter how long it takes,” Shiu said. “Judge Chapman’s decision upholds the legal principle of making victims of discrimination whole, and these workers deserve to get the full measure of what is owed to them.”

Employment attorney Donna Ballman, author of “Stand Up for Yourself Without Getting Fired,” said that such lengthy cases are not unheard of.

“I always tell people that real court cases aren’t like the ones you see on TV,” Ballman said. “On TV, they go to the lawyer and get a trial or hearing the next day. Real lawsuits are long and drawn-out and expensive. You have to prepare to be in it for the long haul if you want any chance at justice in the justice system.”

 

Ruling May Set New Precedent

One of the reasons the suit dragged on for years is because Bank of America’s attorneys doggedly contested the labor department’s authority to prosecute the bank under laws that dictate the hiring practices of federal contractors. Bank of America argued that it was not a contractor of the federal government, but Chapman disagreed on the grounds that the bank is federally insured.

Washington, D.C., attorney Thomas Simeone said this ruling is “very broad and could open up thousands of businesses to liability.”

Thomas Simeone

Thomas Simeone

“The traditional view of a contractor is a company that prevails on a bid to perform services for the government,” Simeone said. “To the contrary, federal deposit insurance is mandatory for all federally chartered banks and savings institutions. In addition, the bank is not providing any service to the government, but is instead receiving a service in exchange for payment of a fee.”

Simeone said Chapman’s interpretation of the federal contractor definition could include “recipients of farming subsidies, corporations complying with security laws and other companies that up to now have not been considered contractors.”

Taken to its logical extreme, Simeone said the ruling could even extend to individuals who receive food stamps or other social assistance in exchange for compliance with federal guidelines.

“Accordingly, I would not be surprised for the bank to appeal the ruling to court,” Simeone said. “It sets a potentially very dangerous precedent.”

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