In 1971 Federal Judge Robert F. Peckham directed a settlement between Bank of California and a class of women and minorities that agreed to six of the top 18 bank members of management being women and 6 be black and other minorities within five years with funds set aside for special training.  

The agreement was signed by other major California banks, Savings and Loans, Fireman’s Fund Insurance Co. and several major New York banks. The agreement was supervised by the Federal Court of Northern California.

How did this class action lawsuit come about?  The suit was put together by Michael Phillips ( me), a former Vice President of the Bank of California and brought by Robert Gnaizda, a lead attorney with Public Advocates.

The origin of the case goes back to a visit from a black bank loan examiner to Mr. Phillips office in San Francisco. The bank employee had lunch with several other loan examiners at the Jonathan Club in Los Angeles while they were working as a team in downtown Los Angeles. They agreed to get together after work for basketball at the Club where the bank was a member. When the group arrived they were told the courts were not available. When the white loan officers returned without the black officer they were told that blacks were only allowed in the Jonathan Club for lunch.

Upon returning to the San Francisco loan examiners headquarters the group told their manager about the discrimination they had faced.  After a week with no action by the department manager, the white officers complained openly.  The embarrassed black officer felt compelled to do something. He went to Mr. Phillips to describe the situation.  Mr. Phillips had been known as a pro-black activist at the U. of Chicago and had friends in common with the black employee who was from Chicago.

Mr. Phillips wrote a brief polite note to the bank President calling attention to the disgruntlement in the Loan Examiner’s department.  The bank President was on vacation. The note went to the bank Executive Vice President, John Schutt, who was acting Bank president at the time.  Mr. Schutt was coincidentally president of the Jonathan Club.  He ordered that Mr. Phillips be fired.

Mr. Phillips, as a vice president, could not be fired. But he agreed to a generous severance package and left after a month.  

Mr. Phillips, after months of searching, found Mr. Gnaizda at the newly opened office of Public Advocates.  Mr. Phillips also found suitable class action plaintiffs and with his detailed insider knowledge of the bank prepared a case for employment discrimination,. which was brought to Northern California Federal Court.  The facts of discrimination were overwhelming and the case was promptly settled.  (Photo of Gnaizda on right)

The Bank was angry that the case had been brought and had enjoyed favorable publicity for the plaintiffs.  The Bank agreed to the extraordinary employment settlement on the condition that Mr. Phillips received no compensation.  Phillips agreed.

The Bank of California class action settlement and the many other financial co-signers of the suit made this the biggest primary case in employment discrimination law in the United States.