UPDATE 2-Merrill settles Iranian Muslim bias lawsuit

(Adds previous Merrill cases and bylines)

NEW YORK, Dec 31 (Reuters) - Merrill Lynch & Co Inc MER.N agreed to pay $1.55 million and improve employee training to settle a lawsuit that claimed discrimination in the firing of an analyst because he was an Iranian Muslim.

Tuesday’s settlement with the U.S. Equal Employment Opportunity Commission resolved allegations that Merrill refused to promote and in August 2005 fired quantitative analyst Majid Borumand because of his religion and national origin, and retained and promoted a less qualified person.

According to the June 2007 complaint filed with the U.S. district court in Manhattan, Borumand was subject to such comments as “the reason that you are not allowed on the trading floor is because you are from a country which has a high risk factor and a threat.”

Merrill denied the allegations.

Spencer Lewis, New York district director of the EEOC, in a statement said: “All individuals deserve the freedom to compete on a fair and level playing field, which did not occur in this case.”

A Merrill spokesman declined to comment on the settlement. Merrill is being acquired by Bank of America Corp BAC.N in a transaction expected to close on Thursday.

According to court papers, Merrill will pay Borumand $713,333 in back pay and $356,667 in compensatory damages and pay $480,000 for legal fees.

Under the settlement, Merrill agreed to train its employees regarding bias based on religion and national origin, and not retaliate against workers who oppose discrimination.

The EEOC will also monitor Merrill to ensure it complies with the settlement, which remains in effect for two years, court papers showed.

The case is not the first in which Merrill employees have claimed discrimination.

A complaint filed in 2005 in U.S. District Court in Chicago on behalf of African-American brokers accused Merrill of discrimination on the basis of race. That litigation is continuing.

In the late 1990s, Merrill agreed to pay more than $100 million to resolve gender bias claims by more than 900 female brokers. And in 1974, the EEOC sued Merrill for failing to hire women and minorities as brokers. Merrill agreed to settle that suit by hiring more women and minority brokers. (Reporting by Jonathan Stempel, additional reporting by Elinor Comlay; editing by Jeffrey Benkoe)