Wells Fargo is facing a Department of Labor probe into its pledge to significantly expand the number of Black managers and executives at the firm over the next several years, according to news reports.
In June — in the wake of the killing of George Floyd, a Black man, while in police custody in Minneapolis — Wells Fargo CEO Charles Scharf told employees in a memo about several measures to drive diversity at the firm. These included tying executives’ pay to how much they’re increasing diversity in their departments, creating a new position on diversity and inclusion and the need to double the number of Black managers and executives — who currently make up 6% of senior management — within five years.
But Craig Leen, director of the Office of Federal Contract Compliance Programs, said such initiatives appear “to imply that employment action is being taken on the basis of race,” he wrote in letters dated September 29 sent to Wells Fargo and Microsoft, according to USA Today. The office oversees federal contractors for the DOL, the publication writes.
“Wells Fargo is committed to and taking action to become a more diverse and inclusive company,” the bank says in a statement cited by USA Today. “Numerous efforts are underway to implement changes at all levels of the company, and we are confident that they comply with U.S. employment laws.”
The inquiry comes on the heels of an executive order from President Donald Trump, issued at the end of September and going into effect in November, barring government contractors from promoting “divisive concepts” that are “rooted in the pernicious and false belief that America is an irredeemably racist and sexist country.”
The executive order requires companies to stop any training “that inculcates in its employees any form of race or sex stereotyping or any form of race or sex scapegoating" or face the cancellation of their government contracts, USA Today writes.
The NAACP Legal Defense and Educational Fund and the Lawyers’ Committee for Civil Rights Under Law are among dozens of civil rights groups that condemned Trump’s executive order, slamming it as another example of the President’s "support for white supremacists while demonstrating deep hostility to civil rights and racial justice,” according to the publication.
In what at least appears to be a staggering reversal of priorities, the DOL’s inquiry into Wells Fargo also comes less than two months after the company reached a $7.8 million settlement with the agency to settle claims that it had discriminated against tens of thousands of Black and female job applicants.
Last month, Scharf apologized for suggesting that there was a lack of qualified Black candidates for jobs in the financial services industry — which he did while announcing the plan to double the number of Black executives at the company.
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