By Pam Martens: August 22, 2013
The lingering impact of the Wall Street crash of 2008 to 2010 has devastated the job market for young college grads. The government debt piled on to bail out Wall Street has killed the prospects for the next generation’s standard of living. Now, Wall Street is literally killing the next generation.
Moritz Erhardt, a 21-year old college intern working for the investment banking division of Bank of America Merrill Lynch, was found dead in his shower after working around the clock for three straight days at the U.S. bank’s offices in London, according to published reports from fellow interns who shared the premises.
Merrill Lynch, known on the street as “Mother Merrill,” wants you to know it is “deeply shocked and saddened.”
London newspapers are reporting that Erhardt had worked eight all-nighters in a two-week period in hopes of securing a permanent post at Merrill when he graduated. Summer internships in both London and New York for the largest Wall Street firms frequently consist of grueling100-hour work weeks, including Saturday and sometimes a half-day on Sunday. Based on hours worked versus compensation, interns are frequently making $15 an hour – the amount that fast food workers in America are demanding in a strike called for August 29.
A companion tragedy of this young man’s death is the grief and self-blaming his parents will be haunted with the remainder of their lives. These are very likely parents who boiled his baby bottles, put safety latches on the cabinets as the toddler took his first steps, diligently saved for his college education. But they didn’t realize they needed to question if turning their son over to the care and stewardship of one of the largest financial institutions in the world for a summer internship could lead to his death.
In 1996, I interviewed at Merrill Lynch in Garden City, New York. That was 12 years before what was then the largest retail brokerage firm went on a mortgage derivatives binge and collapsed into the arms of Bank of America. The branch manager led me from one office to another, which frequently had their doors open, pointing to each broker and stating: “This is my million dollar guy; this is my $900,000 guy, this is my $750,000 guy,” referring to the annual revenues the brokers produced for the firm. Fortunately, I was able to secure employment a few blocks down the street for another firm that introduced its employees by name.
My next foray into the inner sanctum of Merrill Lynch came on April 18, 2000, when myself, protesters from the National Organization for Women, and former female stockbrokers at the firm invaded its shareholders’ meeting in Princeton, New Jersey with protest signs, calling out its violations of civil rights laws and its policy of barring its employees from suing it in court. Merrill Lynch, like other big Wall Street firms, makes both its customers and employees agree to settle their claims against the firm in private, mandatory arbitration proceedings – a system that has been rife with conflicts of interests for decades. In this Bloomberg report, when three arbitrators had the temerity to rule against Merrill Lynch in 2011, they were fired by the industry-run private justice system.
A few years ago, I came by one of the big Wall Street firms’ mandatory arbitration agreements, buried in the fine print of a stack of employee documents. It reads as follows:
“The Policy makes arbitration the required and exclusive forum for the resolution of all employment disputes based on legally protected rights (i.e., statutory, contractual or common law rights) that may arise between an employee or former employee and the Corporate & Investment Bank or its current and former parents, subsidiaries and affiliates and its and their current and former officers, directors, employees and agents…the arbitrator shall be bound by applicable Firm policies and procedures and shall not have the authority to alter or otherwise modify the parties ‘at-will’ relationship or substitute his or her judgment for the lawful business judgment of Firm management.”
Arbitrators are not required to follow the nation’s laws or legal precedent or write a reasoned decision based on those laws.
In the past, Merrill Lynch was one of the firms notorious for barring its brokers from suing it in court but, when a broker attempted to leave and take his clients to another firm, it would utilize its right to go to court against the broker and get a TRO (temporary restraining order) to obstruct the employee’s ability to shake free of the firm and its policies. According to this On Wall Street article, Merrill was still using the TRO tactic as recently as 2011.
In a normal world, there might be some hope that this tragic death would be a wake-up call to Wall Street and to the U.S. Labor Department. But as we’ve seen from the lack of financial reform since Wall Street crashed the U.S. economy in 2008 to 2010, this is not a normal world when it comes to the abuses that the Executive Branch and our Congress will tolerate from Wall Street.
