Wells Fargo Settles OT Case
Wells Fargo Bank agreed to pay $15 million in back overtime wages to nearly 4,500 current and former home mortgage consultants, including 50 to 100 in Houston, where the case was filed and eventually settled in federal court.The loan officers at Wells Fargo and its predecessor, Wachovia Corp., worked more than 50 hours a week taking applications for home loans but were incorrectly classified by the bank as exempt from overtime, said Houston attorney Rhonda H. Wills, who represented the employees who sued the bank.
U.S. District Judge Gray Miller signed the settlement agreement on Friday.
The average recovery is about $3,400 per person, said Wills, who said the wage recovery goes back three years. The seven ex-employees who came forward initially in 2011 will receive $15,000 to $20,000 each, according to the settlement agreement.
Wills estimated the average annual salary for the home mortgage consultants was between $45,000 and $50,000.
The settlement also includes $11.5 million in legal fees.
"Wells Fargo has maintained that it has compensated all of its team members fully and fairly and in accordance with the law," said Tom Goyda, spokesman for Wells Fargo in St. Louis.
He said Wells Fargo decided to settle the lawsuits to avoid further costs to the business and interference with its operations.
"We believe that fairly compensates all of those who elected to participate in those actions," Goyda said.
The class size was originally about 12,000 employees and ex-employees, but Wills said only 4,500 opted to join the class and now can share in the settlement proceeds.
The overtime case got its start after two ex-employees who worked at Wells Fargo in Houston met with Wills. Others came forward and the case eventually was certified as a nationwide class action.
Wills said Wells Fargo argued that its loan officers were not eligible for overtime pay because they were outside sales people. She said she contended that the bankers didn't leave the bank; they met with homebuyers who came into the branches to apply for home loans.
In 2011, Wells Fargo reclassified its home mortgage consultants, making them eligible for overtime pay, according to the lawsuit.