Wells Fargo Financial Adviser Pay Row Ends with $9.5M Settlement

by Norman B. Blumenthal on June 20, 2018

blumenthal nordrehaug bhowmik de blouw llp, california employment law, california employment law attorneys, adviser pay row, business expenses and commissions, proposed settlement, violated california labor codePreliminary approval was requested for a $9.5 million settlement Wells Fargo has agreed to pay a proposed class of financial advisers in order to put an end to an action alleging that the bank did not properly reimburse business expenses and/or pay their financial advisers earned commissions on a timely basis. The 2,198-member class is made up of both current and former financial advisers. All the financial advisers worked at Wells Fargo bank from March 2010 through January.

If the proposed settlement is approved, each member will receive, on average, $2,783 after fees and costs are taken care of. The proposed settlement would also end claims that the bank violated California labor codes. The bank issues paychecks every two weeks, totaling 26 paychecks per year with commissioned earned the previous month included in the second paycheck of each month.

Wells Fargo claims that financial advisers have the option of receiving their commissions earlier based on estimates, but that very few choose the option. Wells Fargo claims that early payment of the commissions is impractical. The financial advisers also claim that the bank shorted them on business expenses that should have been reimbursed.

The proposed net settlement fund is expected to be $6,163,334 according to the settlement proposal submitted to the court. The settlement would cover approximately 130,000 work months. Class members would receive about $47 per month they worked (after fees/costs are covered). The plaintiffs filed suit in 2014, originally arguing additional claims that they should have been treated as hourly with time cards/a time clock. They previously sought certification of a nationwide collective action under the Fair Labor Standards Act (FLSA).

In early 2016, claims that Wells Fargo violated FLSA by misclassifying advisers were thrown out by a California federal judge based on the financial advisers’ own testimony. This ruling did not toss out the claims that were addressed in the current proposed settlement.

The financial advisers attempted to appeal the dismissal of the FLSA claims, but it was shot down. Negotiations on several surviving claims followed and led to the current proposed settlement agreement.

If you have been misclassified as exempt or if you are not paid overtime compensation you are due, please contact one of the experienced employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.

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