Wells Fargo is already facing four potential class-action suits and could soon face more from customers, former employees and investors over the bank’s fake-accounts scandal. (Justin Sullivan/Getty Images)
James Rufus Koren
September 26, 2016
As beleaguered banking giant Wells Fargo & Co. deals with inquiries from federal prosecutors and scrutiny from lawmakers, it’s facing a growing number of civil lawsuits brought by customers and former employees.
In a little more than two weeks since the San Francisco bank admitted that employees created as many as 2 million accounts for customers without their permission, Wells Fargo has been hit with at least four prospective class-action lawsuits – and several law firms are looking for plaintiffs and considering cases of their own.
Among the latest actions was a case filed Monday in Los Angeles federal court by attorney Jonathan Delshad on behalf of employees who may have been fired or demoted over the last 10 years for refusing to open bogus accounts to meet aggressive sales goals.
It alleges violations of federal financial and labor laws, including failure to pay for overtime worked to meet the goals. It seeks damages of at least $7.2 billion.
“I expect many other law firms around the country will be bringing cases,” said Delshad, a West L.A. lawyer. “A lot of attorneys are going to try to get on the bandwagon.”
Wells Fargo has admitted to firing roughly 5,300 employees since 2011 for opening accounts without customers’ knowledge. On Sept. 8, it agreed to pay $185 million to federal regulators and the Los Angeles city attorney’s office over the practices.
Delshad had filed a previous class-action suit last week in Los Angeles Superior Court but that one was limited to employees who had worked for the bank in California. It seeks damages of $2.6 billion for wrongful termination and unpaid wages.
Soon after filing the case, Delshad said his office started receiving calls from former Wells Fargo employees across the country, spurring him to file the federal case.
“We’ve had constant phone calls from people saying the same things that happened in California had happened in other places,” he said. “They all say the exact same thing, whether they’re in Alabama, Georgia, Alaska, Florida. They call, and it’s like listening to a tape recorder.”
Another case, filed in federal court in Utah and also seeking class-action status, was filed on behalf of consumers who were harmed by the bank’s practices. The action was taken despite the fact that Wells Fargo has successfully fought off many lawsuits from consumers because of arbitration clauses in contracts that force customers to give up their right to take the bank to court.
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