Wells Fargo to Pay $9 Million in California Labor Class Action
Wells Fargo has agreed to pay a settlement valued at nearly $9 million to resolve claims stemming from a 2015 class action labor lawsuit on behalf of over 2,000 of the bank’s mortgage consultants and private mortgage bankers. The class action alleged that Wells Fargo violated California Labor Code laws by failing to provide timely compensation to some workers, specifically via a failure to pay work-related expenses and issue commission payouts that were stipulated in the employees’ contracts.
Wells Fargo admitted no wrongdoing in the settlement, which was outlined earlier this month in a California federal court filing. This week, the plaintiffs — listed as the certified class of workers in the class action court documents — filed a motion for preliminary approval, stating the settlement is fair and reasonable. The approval comes after the parties attended mediation in December.
Approximately 2,100 affected Wells Fargo employees will receive compensation from a $5.8 million fund structured within the overall settlement figure. Approximately $3 million of the remaining funds will be used for attorney fees, and the lead plaintiff, Huy Nguyen, will reportedly receive a $15,000 incentive award.
The approval motion states, “This represents a substantial recovery on the class claims, including full reimbursement on the expenses incurred by the class for marketing tools that gave rise to the central claim for damages in this action.” Moreover, the motion confirms Wells Fargo has made internal changes since the 2015 labor law violations complaint filing.
“In sum, with approval of the settlement and Wells Fargo’s reforms, plaintiff and his counsel will have achieved substantial remedies for the workplace issues that prompted the filing of this class action,” the official motion argues.
Nguyen, the lead plaintiff, initially filed suit in San Francisco County Superior Court in August 2015. Three months after the filing, the case was removed to federal court. Nguyen claims that, as a consultant, he was encouraged to use the company’s marketing tools, including his own Wells Fargo webpage and a company email account. Despite said encouragement, Nguyen claimed Wells Fargo charged him for those products. Nguyen also alleged that his commission was paid two weeks later than the end-of-month date the incentive plan stipulated per his contract.
California is well known for having strict labor law codes, and is considered a leader in pioneering legislation on behalf of workers, and passing labor-friendly bills that have ultimately led to further protections for myriad workers throughout the nation. California provides its workers with what are considered some of the most favorable regulations for overtime and other employee benefits throughout the country.
Overtime in California is paid at time-and-a-half for all hours worked over 40 hours in a week – similar to other states. Additionally, however, overtime is paid for all hours worked over the standard eight hours in a workday, and for the first eight hours worked on the seventh consecutive day of work in a workweek. Moreover, California labor laws provide “double time” (double the regular rate of pay for all hours worked over 12 hours in a day and over eight hours on the seventh consecutive day of work in a workweek) for workers.
Wells Fargo did not issue a public statement following the announcement of the settlement.