by Art Gutman Ph.D., Professor, Florida Institute of Technology
On June 8, 2011, Judge Colleen Kollar-Koteely of the District Court of the District of Columbia approved a 32 million dollar settlement between Wells Fargo and a class of more than 3,000 current and former female financial advisors. The class includes women financial advisors at Wells Fargo Advisors or Wachovia Securities LLC (previously acquired by Wells Fargo) between March 17, 2003 and January 25, 2011, and those who worked for Wells Fargo Investments LLC between December 31, 2008 and January 25, 2011. The class also includes female financial advisors at Prudential Securities and A.G. Edwards & Sons (previously acquired by Wachovia). The settlement culminates a Title VII lawsuit by three named plaintiffs in September 2009 accusing Wells Fargo of a pattern of discrimination against women with respect to work assignment, distribution of accounts, opportunities for advancement, assignment of partnership tams, and other terms and conditions of employment. The settlement requires a 32 million dollar payment into a settlement fund, 9.6 million of which is for attorneys’ fees and settlement administration expenses. The attorneys will also receive a $320,000 payment this year and $200,000 per year for three years (plus interest) for future fees and expenses for monitoring and enforcement of the settlement.
In addition to monetary considerations, Wells Fargo agreed to internal posts of field management jobs, training for management positions, and evaluation of field management based on diversity efforts. Wells Fargo also agreed to revise and publish policies for distributing accounts of departing/retiring advisors, and to consult with an industrial psychologist(s) to implement a cost-effective and reasonable method to adjust job performance appraisals for the prior 12-month period and to keep records of bonuses and compensation paid to lateral hires. Finally, Wells Fargo agreed to develop a system of internal data collection to monitor and ensure settlement compliance, including account distributions; new team agreements, commission splits among the team's financial advisers, future sexual harassment or sex discrimination complaints. The industrial psychologist(s) will produce a written report every six months for Wells Fargo, the settlement monitor, and class counsel covering those matters, the settlement provides.
June 21, 2011