DOL Will Investigate Wells Fargo

Lawsuits alleging unpaid overtime, misclassification sparked call for inquiry

By Allen Smith, J.D. Sep 27, 2016
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It's not just drastic measures, such as a time-card system that rejects overtime hours, that might be highlighted in an overtime claim. In one recent complaint against Wells Fargo, the plaintiff argued that personal cell-phone numbers printed on business cards showed that mortgage officers often worked more than 40 hours in a workweek—a crucial part of his overtime claim.

Sen. Elizabeth Warren, D-Mass., mentioned this complaint in a Sept. 22 letter to the Department of Labor (DOL), urging the DOL to investigate whether the bank violated the Fair Labor Standards Act (FLSA) when employees were pressured to meet aggressive sales quotas that she blames for the creation of 2 million phony accounts.

In a Sept. 26 letter to Warren, DOL Secretary Thomas Perez noted that he has "directed enforcement agencies within the department to conduct a top-to-bottom review of cases, complaints or violations concerning Wells Fargo over the last several years." The agencies include not only the Wage and Hour Division, but also the Employee Benefits Security Administration, the Occupational Safety and Health Administration, the Office of Federal Contract Compliance Programs and the Office of the Solicitor. And he noted that the department has created a web page to inform Wells Fargo employees of their rights.

Overtime Lawsuits

In her letter, which seven other senators also signed, Warren referred to a number of overtime lawsuits against the bank, including those brought by:

  • A mortgage officer alleging in 2016 that the bank violated the law by failing to pay overtime wages for hours worked in excess of 40 per week.
  • Branch managers claiming in 2013 that the bank misclassified them and failed to pay overtime.
  • Loan officers filing a complaint for misclassification and failure to pay overtime from 2008 to 2011.
  • Technical support workers claiming in 2008 that they were misclassified and didn't receive owed overtime. More than a dozen similar suits were reportedly filed that year in seven different states.
  • Bank tellers filing a complaint in 2003 for overtime violations going back to 1999.

Complaints about failure to pay overtime are common, so it isn't surprising that an employer as large as Wells Fargo is facing them. However, some of the allegations in the most recent lawsuit involving a mortgage officer may raise a few eyebrows.

The plaintiff, Robert Joseph Buglak Jr., alleges that Wells Fargo put mortgage officers' personal cellphone numbers on their business cards because the bank wanted them to be available at any time for customers and referral sources. He asked the court to recognize a class of more than 1,000 mortgage officers.

The bank issued laptop computers to mortgage officers so they could work from home and other locations. This was presented in the complaint as part of the evidence that the mortgage officers worked off the clock from home after hours and on weekends to process loans toward closing.

In addition to scheduled hours, Buglak and similarly situated mortgage officers went to open houses to establish relationships with realtors and visited other bank locations, resulting in more unpaid overtime, he alleged.

The mortgage officers also had to conduct off-the-clock work, according to the complaint, in:

  • Performing preliminary activities prior to their scheduled shift.
  • Working through all or a portion of their lunch breaks.
  • Working after their scheduled shift.

Wells Fargo managers often discouraged mortgage officers from reporting their true hours of work, the complaint maintained.

If a mortgage officer worked more than 40 hours a week, the hour-recording system would automatically reject any additional hours, the complaint said. Employees could enter no more than 40 hours and had to confirm the amount entered.

Employees had to get authorization from their supervisors to put overtime in the system, but such authorization allegedly was never given, even after Buglak showed his supervisor daily logs and e-mails reflecting actual overtime work.

"Wells Fargo was regularly failing to pay certain employees overtime," said James Sutton III, an attorney in Feasterville, Pa., who is representing the plaintiff. "Setting up policies to make sure overtime is properly tracked and paid is very important," he added. "However, making sure those policies are actually followed is also critical."

Warren Called for Deeper Investigation

Warren wrote in her letter that, in the wake of the settlement of the phony accounts litigation, "Dozens of former and current Wells Fargo employees have come forward to describe the lengths they went to in order to meet the bank's aggressive sales quotas."

She wrote that, "When quotas weren't met, employees faced threats of termination; mandated hours of unpaid overtime; harassment; and other forms of retaliation." She urged DOL to conduct "a comprehensive inquiry into whether Wells Fargo aggressively skirted overtime laws—failing to pay overtime to bank tellers and associates who stayed late or came in on weekends to meet their sales quota, or misclassifying salaried bank associates as overtime-exempt to avoid paying the overtime guaranteed to them by the FLSA. Such allegations are especially worrisome on the eve of the Dec. 1, 2016, implementation of the department's updated overtime regulations."

Erika Reynoso, assistant vice president of corporate communications with the bank, issued the following statement: "At Wells Fargo, our team members are our greatest asset. We strive to make every one of them feel valued, rewarded and recognized and we pride ourselves on creating a positive environment for our team members, including market competitive compensation, career-development opportunities, a broad array of benefits and a strong offering of work-life programs."

She also noted that the company has received the Gallup Great Workplace award three years in a row.

The other senators signing Warren's letter were Sherrod Brown, D-Ohio; Kirsten Gillibrand, D-N.Y.; Mazie Hirono, D-Hawaii; Robert Menendez, D-N.J.; Jeffrey Merkley, D-Ore.; Jack Reed, D-R.I.; and Bernie Sanders, I-Vt.

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