Print  Save Email | Text A A A |
  
  Do You Recommend This Article?  

Wells Fargo Settles with DOL for $7.8M Over Hiring Discrimination Claims

August 25, 2020

Wells Fargo has agreed to pay $7.8 million to settle claims that it had discriminated against tens of thousands of Black and female job applicants, according to news reports. 

The company allegedly discriminated against 34,193 Black applicants for positions in banking, customer service, sales and administrative support, as well as against 308 women applying for administrative support positions, Bloomberg writes, citing the Department of Labor.

As part of its settlement with the DOL, Wells Fargo agreed to make job offers to 580 applicants impacted by the alleged bias, according to the news service, which also cites the agency’s Office of Federal Contract Compliance Programs.

Wells Fargo didn’t admit liability in the case, according Bloomberg. However, the company also consented to an “enhanced” compliance agreement that requires it to proactively monitor and take other measures in some of its business lines, the news service writes. 

A Wells Fargo spokesperson tells Bloomberg that the settlement has to do with OFCCP’s “routine review of hiring data” in a select number of U.S. regions.

“The review found lower selection rates for African Americans for some teller, customer service and personal and phone banker positions, while Hispanics were generally the group with the highest selection rate, reflecting the need for Spanish-language skills for certain customer-facing roles,” the spokesperson tells the new service.

Wells Fargo has reached at least two other settlements over bias allegation in recent years, Bloomberg writes. In 2019, it paid $600,000 to settle allegations of race- and sex-based bias in its hiring practices, according to the news service. And in 2015 the company settled allegations that it failed to provide accommodations to an applicant with a disability, Bloomberg writes.

Wells Fargo, as many American corporations, has been vocal about its commitment to diversity and social justice in the wake of the killing of George Floyd by a Minneapolis police officer in May and the subsequent protests that have engulfed the country in the months since then. Wells Fargo CEO Charles Scharf emailed the firm’s employees within days of Floyd’s death, telling them that while, as a white man, he can’t “really appreciate and understand what people of color experience,” he can “commit that our company will do all we can to support our diverse communities and foster a company culture that deeply values and respects diversity and inclusion,” as reported.  

Earlier this month, Wells Fargo declined to provide diversity data requests by FA-IQ. In its most recent report on racial and ethnic employee demographics, issued in December 2018 — which was before Scharf started in October 2019 — the company said its U.S. workforce was 44% ethnically and racially diverse, as reported. 

Job cuts

Separately, Wells Fargo has ended its moratorium on layoffs put in place earlier this year to help ameliorate the financial devastation caused by the Covid-19 pandemic, according to Bloomberg. 

In March, the company suspended layoffs and said it was putting a halt on “initiating new displacements,” much like most of its competitors, including Morgan Stanley, Bank of America and Citigroup.

But in early August, the company “resumed regular job displacement activity,” a spokesperson for Wells Fargo tells Bloomberg in a statement, without offering details. In July, Bloomberg reported that the company could slash tens of thousands of jobs.

“We are at the beginning of a multiyear effort to build a stronger, more efficient company,” the spokesperson said last week, according to the news service. “We expect to reduce the size of our workforce through a combination of attrition, the elimination of open roles and job displacements.”

The first jobs to go will be ones that the company planned to slash in the beginning of the year, prior to the coronavirus crisis, Bloomberg writes, citing people familiar with the situation. They will include “underperformers” and extend to management roles, the people tell the news service. 

Do you have a news tip you’d like to share with FA-IQ? Email us at editorial@financialadvisoriq.com. 

By Alex Padalka
  • To read the Bloomberg article cited in this story, click here if you have a paid subscription.
  • To read the Bloomberg article cited in this story, click here if you have a paid subscription.
Print  Save Email | Text A A A |
  Do You Recommend This Article?  
  
Tags:  Staffing and recruiting , Regulatory/legal issues , Bank of America , Citigroup , Morgan Stanley , Wells Fargo

Comment or Feedback

* Required
Financial Advisor IQ will send a confirmation email to your registered email address.