Employment Law Daily Wells Fargo facing $2.6B class suit for employees fired, demoted over fraud scheme quotas
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Wednesday, September 28, 2016

Wells Fargo facing $2.6B class suit for employees fired, demoted over fraud scheme quotas

By Pamela Wolf, J.D. On the heels of a September 22 request by Democratic lawmakers that the Labor Department look into potential FLSA violations when Wells Fargo employees were purportedly pressed to work long hours without overtime pay, two former employees have filed a $2.6 billion class action in California against the bank. The complaint asserts state law claims of retaliation, wrongful termination against public policy, unlawful business practices, and unpaid wages for overtime and off-the-clock work. Wells Fargo recently entered a $185 million settlement with the Consumer Financial Protection Bureau and fired more than 5,000 employees for creating 2 million-plus checking and credit card accounts that may not have been authorized by customers. Fraudulent scheme. "Wells Fargo implemented a fraudulent scheme and scam to increase Wells Fargo stock price by aggressively pushing their employees to open accounts to increase their cross-sell numbers and not putting any barriers or checks in place to see if the accounts were fraudulently and illegally opened or not," according to the complaint, which asserts that the scheme was implemented nationwide. The bank was purportedly aware that many of the accounts being opened were "either illegally opened, unwanted, carried a zero balance, or were simply a result of unethical business practices." Wells Fargo also knew that what the complaint called "their unreasonable quotas" were driving these unethical behaviors. Retaliation when quotas weren’t met. "The biggest victims of Wells Fargo’s scam is the class of victims that were fired because they did not meet these cross-sell quotas by engaging in the fraudulent scam that would line the CEO’s pockets," according to the plaintiffs. "They are the employees that this lawsuit seeks to redress." "In order to be able to perpetrate their fraudulent scam, Wells Fargo fired employees who did not meet their impossible quotas," the plaintiffs allege. "Without firing or demoting employees who failed to perpetuate the scam, Wells Fargo could not sufficiently ‘motivate’ or encourage those employees who met impossible quotas by taking fraudulent and illegal actions to increase ‘cross sells’ so that Wells Fargo’s stock price would double." Unpaid wages. Once it became public knowledge that Wells Fargo was encouraging illegal behavior by firing or demoting employees for not meeting the quota, the bank stopped using the quota, according to the complaint. But employees who lost their jobs as a result of not engaging in illegal activity to meet quotas were never compensated. The two plaintiffs who filed the suit were hired as bankers to meet certain "solutions" quotas each day, the complaint alleges. Both were demoted and/or terminated because they failed to meet quotas and opposed and would not engage the "illegal ‘gaming’ practices" to meet the quotas like other employees at Wells Fargo. As a result of their reluctance to meet the quotas through "gaming," the plaintiffs "were counseled, demoted and later terminated," according to the complaint. Both employees suffered economic and non-economic damages including loss of income, back and front pay, and emotional distress, according to the complaint. Among other things, the complaint seeks $2,600,000,000 in damages. The plaintiffs filed their lawsuit, Polonsky v. Wells Fargo Bank & Company, in the Superior Court of California, County of Los Angeles; the case is No. BC 633475.

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