Former Merrill financial solutions adviser Katherine Mackey sued Merrill Lynch and Bank of America to invalidate their mandatory employment-arbitration policy. For trainees, the takeaway is direct: the policy still stands unless a court voids it, so assume arbitration applies while the case proceeds. Mandatory arbitration means covered workplace claims go to a private forum instead of court.
According to Thomson Reuters, Mackey filed in Manhattan federal court on Oct. 29, 2026, asking the court to strike down the rule the Thomson Reuters account. There is no compensation fund or claim form tied to this filing.
Official resources:
- Read the official guidance from Finra — Use this primary source to verify the official guidance.
- Read the official notice from Krro — Use this primary source to verify the official announcement.
Table of Contents
- What policy is being challenged?
- Why could trainees be covered without signing?
- Why does the 2013 settlement matter?
- What should trainees do now?
What policy is being challenged?
The challenged policy dates to November 2024. It routes covered employment claims, including discrimination and harassment, into private JAMS arbitration. JAMS is a private arbitration provider used here instead of a public court. The policy also requires employees to forever waive court lawsuits and class actions for covered claims.
Mackey argues JAMS arbitration lacks basic due process safeguards for civil rights cases. She says that defect should not block her federal-court discrimination claims. Bank of America takes the opposite view. According to Thomson Reuters, the bank says Congress and the Supreme Court encourage employment arbitration and that JAMS procedures are routinely upheld the Thomson Reuters account. It has pledged a vigorous defense.
Why could trainees be covered without signing?
Merrill and Bank of America told employees that staying employed for 30 days after notice counted as acceptance. That matters for trainees because continued work, not a separate signature, could create agreement. Mackey joined Merrill's aspiring-adviser program in 2023 at age 65 in Reston, Virginia. She alleges younger male colleagues deprived her of resources because of age and gender.
She says she was fired in February 2025 after missing production goals. For readers of a settlements site, this is not a class payout. It is a fight over forum: arbitration or court. No judge has certified a class or ordered payments.
Why does the 2013 settlement matter?
Mackey alleges the new policy breaks Merrill's $160 million August 2013 settlement with hundreds of Black brokers. Those brokers claimed bias in pay, promotions and account distribution. That earlier case, McReynolds, ended with final approval from U.S. District Judge Robert Gettleman in Chicago, according to Missouri Lawyers Media the Missouri Lawyers Media report.
The underlying lawsuit began in 2005 over opportunities for Black financial advisers. The link is legal, not automatic eligibility. Mackey argues the prior settlement limits Merrill's ability to impose this kind of waiver. The court has not decided whether that argument succeeds.
What should trainees do now?
Assume both clocks may run. According to Thomson Reuters and AdvisorHub reporting in the research packet, no court has yet voided the policy and Mackey filed protectively in arbitration while seeking a court case. That dual-track approach is the practical model for trainees with live disputes.
Missing one deadline can end a claim even if the other forum later looks better. FINRA's own rule helps explain the boundary: FINRA Rule 13201 says statutory employment-discrimination claims are not required to be arbitrated in FINRA unless the parties agreed before or after the dispute arose. Keep the notice, pay records showing continued employment, and any arbitration filing receipt together.
- Save the November 2024 arbitration notice and any email, handbook update, or acknowledgment screen.
- Record your 30-day window: notice date, continued work dates, transfer, leave, or termination dates.
- Calendar arbitration, court, and agency deadlines separately and file protectively when in doubt.
- Get an employment lawyer before opting out, tolling, or choosing one forum only.
- Keep performance plans, production numbers, account assignments, and resource requests if bias is at issue.