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Wells Fargo to Pay $7.8 Million to Settle Hiring Bias Claims (1)

Aug. 24, 2020, 9:59 PM; Updated: Aug. 24, 2020, 11:40 PM

Wells Fargo will pay $7.8 million to settle Labor Department allegations of hiring discrimination against women and Black workers at the bank’s locations across the country.

The bank allegedly discriminated against 34,193 Black applicants for “banking, customer sales and service, and administrative support positions,” and against 308 female applicants for “administrative support positions,” the agency said in a statement.

The San Francisco-based company didn’t admit liability, the department said, but will enter into an “enhanced” compliance agreement, whereby the agency agrees to proactive future monitoring and compliance measures for some of its business functions. The agency typically audits the location of a contractor, rather than its line of business.

Wells Fargo will also extend 580 job offers to applicants affected by the alleged bias, the Labor Department’s Office of Federal Contract Compliance Programs said.

The DOL subagency randomly audits federal contractors for compliance with anti-discrimination and affirmative action obligations. Wells Fargo has settled discrimination claims with the agency at least twice in the past, most recently in fiscal 2019. The bank paid $600,000 to settle claims of race- and sex-based hiring bias claims.

Wells Fargo also settled bias allegations in 2015, after allegedly not providing an accommodation to an applicant with a disability.

“The agreement with the OFCCP relates to its routine review of hiring data from six to 10 years ago in a small number of U.S. geographies,” Peter Gilchrist, a Wells Fargo spokesperson, said in an email. “The review found lower selection rates for African Americans for some teller, customer service and personal and phone banker positions, while Hispanics were generally the group with the highest selection rate, reflecting the need for Spanish-language skills for certain customer-facing roles.”

Centralizing Recruiting

He said the company has significantly changed its hiring practices since that time, “including centralizing recruiting, establishing a recruiting team focused on diverse talent, increasing partnerships with diverse organizations (including historically black colleges and universities), and improving record keeping.”

The Labor Department said in its statement, “the enhanced compliance section in the agreement covers employees in retail bank branch Affirmative Action Programs (AAPs) and 42 Functional Affirmative Action Programs (FAAPs) for 2020.”

“FAAPs enable federal supply and service contractors to develop AAPs based on business or functional units, thereby making it easier for contractors to organize and analyze data, identify issues, establish clear lines of responsibility for implementing their AAPs, and monitor progress,” it added.

Current agency director Craig Leen prioritizes voluntary compliance and other pre-litigation measures, like mediation. Leen’s been at the agency’s helm since 2018.

During the Trump administration, the agency has only filed a handful of discrimination lawsuits against federal contractors, as opposed to the agency’s approach under the Obama administration.

(Updated to include additional details on settlement)

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editors responsible for this story: Martha Mueller Neff at mmuellerneff@bloomberglaw.com; Andrew Harris at aharris@bloomberglaw.com

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