Wells Fargo Advisors Trainee Files Suit: Alleging Recoup of Training Costs is a Violation of Labor Laws

by Norman B. Blumenthal on March 31, 2014

Los Angeles California employment attorney A former Wells Fargo Advisors trainee, Erika Williams, filed a suit. The suit alleges that the firm’s attempts to recoup costs of training provided to those who do not complete the training program is in violation of labor laws. Ms. Williams claims that the firm sought to reclaim over $50,000 after she was discharged from the firm in June of 2013. Ms. Williams claims that this practice is not only in violation of the Fair Labor Standards Act, but that it creates undue hardship on minorities in the training program (who have higher failure rates).

Anthony Mattera, Wells Fargo spokesman, indicated that the company needed time to review the complaint before they could offer any replay to the allegations made in the suit. The case, which seeks class certification, is one of the first to call into question this practice that is common amongst a number of larger firms with extensive training programs. Institutions that have similar practices in place include: Merrill Lynch, Edward Jones and Bank of America. Trainees are often required to enter into agreements that have certain parameters set in place, such as staying at the firm for a certain length of time (typically from 30-40 months for the complete training program and 1-2 years after training is completed as an employee of the company).

According to the complaint filed, the trainee agreement that Ms. Erika Williams entered into with Wells Fargo when she began the program was the typical agreement: 5-year contract valuing training at $55,000. It will be difficult to ascertain how many trainees are actually held liable for training costs as outlined in the trainee agreement because most settle and sign confidentiality agreements.

It will be interesting to see if the suit sparks additional interest in the issue of trainees being held responsible for reimbursing previous employers for training costs post-employment.

Leave a Comment


× 8 = twenty four

Previous post:

Next post: