Wells Fargo’s $95.7 Million Settlement Raises Questions
On September 23, the U.S. District Court for the Northern District of California heard objections to a $95.7 million offer made by Wells Fargo to settle consolidated class action lawsuits brought by Wells Fargo Home Mortgage Consultants (HMCs). The lawsuits allege that the bank violated California state labor laws by failing to either provide or pay for rest breaks for its HMCs.
The consolidated lawsuits, Kang v. Wells Fargo Bank NA and Barreras v. Wells Fargo Bank NA (formerly known as Ibarra v. Wells Fargo Bank NA) have a long and tangled procedural history. The questions now arising from that history threaten to upend a settlement that would otherwise cover as many as 5,377 California HMCs.
In both Kang and Barreras, the wage underpayment was the byproduct of a complicated compensation scheme under which Wells Fargo clawed back hourly wages and vacation time from the HMCs’ earned sales commissions.
