Bank of America ordered to pay $2.2 million for racist hiring practices

A Department of Labor audit found that Bank of America applied different standards to black and white job applicants at its offices in Charlotte, N.C. (Photo by Brian Katt via Wikipedia.)

Almost 20 years after the U.S. Department of Labor began auditing the racial hiring practices at Bank of America's offices in Charlotte, N.C., black job candidates who were unfairly passed over in favor of white candidates are finally reaching closure -- and a financial settlement.

Bank of America has been ordered to pay close to $2.2 million in back pay to African Americans who were improperly denied entry-level jobs, such as bank tellers, at the company's Charlotte facilities.

A federal administrative law judge had found discrimination in how Bank of America hired years ago, but the bank challenged the finding, arguing that the Labor Department office that performed the audit unfairly targeted the company. Bank of America attempted a number of maneuvers to avoid accountability for the discriminatory practices, even asking that the judge review each denied applicant's grievance on a case-by-case basis.

Ultimately, the company unfairly rejected 1,147 African Americans for jobs, according to the Labor Department's Office of Federal Contract Compliance Programs' (OFCCP) review for the hiring periods of 1993 and between 2002 and 2005.

Judge Linda S. Chapman said "the only practical way of formulating the appropriate damages in connection with the Bank's discrimination was with a class-wide, formula driven remedy" because "an exact reconstruction of each of these more than eleven hundred individuals' work histories, as if discrimination had not occurred, would be imprecise and impractical."

Solicitor of Labor M. Patricia Smith accused Bank of America of using "stalling tactics." OFCCP Director Patricia A. Shiu said 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."

At issue was OFCCP’s finding that Bank of America was using inappropriate selection criteria that was leading to racially disparate impacts on employment. According to an OFCCP spokesperson speaking on background, that criteria included credit checks and evaluations of compatibility of work hours used to judge black applicants' qualifications differently than those of white candidates. As a result, the percentage of applicants disqualified was "significantly higher" for African Americans than for whites, and the bank could not explain the discrepancies, the spokesperson said.

Hence Judge Chapman "found that the bank intentionally discriminated against African American applicants by applying selection criteria to them that it did not apply to Caucasian applicants," the OFCCP spokesperson said.

The financial award accounts for the wages that the applicants would have earned if Bank of America had hired them. On top of that, 10 members of the awarded group are to be considered for jobs with the company as they become available.

When OFCCP picked Bank of America for an audit of its hiring procedures, it was enforcing one of its priorities: "[e]liminating the attitudinal and institutional barriers to the advancement of minorities and women in corporate management positions and executive careers."

The office was performing its duties under Executive Order 11246, signed by President Lyndon B. Johnson on September 24, 1965, which prohibits federal contractors from discriminating in employment practices on the basis of race. Bank of America is subject to OFCCP rules due to its status as a federally insured financial institution -- that "FDIC" tag seen on bank windows and all over bank statements and documents.  

This settlement comes a month after one of the brokerage firms Bank of America acquired, Merrill Lynch, settled a $160 million federal lawsuit for employment discrimination against 700 of its black brokers -- one of the largest class action lawsuit settlements ever. Just over a week later, a gender-based employment discrimination suit was settled for $39 million on behalf of women working at both Bank of America and Merrill Lynch.