Wells Fargo Settles $3.5M Advisor Training Class-Action
Wells Fargo Advisors will reimburse $3.5 million to former employees the firm had previously required to pay back the cost of their training when they left or got fired, according to AdvisorHub.
The brokerage has agreed to settle a class-action lawsuit filed in March 2014 claiming violations of labor laws, the industry website writes. The suit claims Wells Fargo Advisors required trainees in its private client group to sign an agreement to reimburse the firm up to $55,000 for the cost of their training if they left or were fired and then sought financial industry employment within five years, AdvisorHub writes.
Only $300,000 of the settlement, however, is reserved for paying back those who had already reimbursed Wells Fargo Advisors, a lawyer for the firm that was co-counsel on the case tells the website in an email. But around 2,000 individuals are affected by the settlement — all of whom had worked at Wells Fargo Advisors between November 2011 through 2016, AdvisorHub writes.
In addition, some former trainees who were in the program as far back as January 2009 are also entitled to payment, the website writes. The minimum that the class action members will receive is $100 each, according to AdvisorHub. The rest of the settlement will go to administering the $3.5 million fund Wells Fargo Advisors set up to compensate former employees and to the lawyers, the publication writes.
Under the settlement, which still needs court approval, the firm agreed to stop claims and collection procedures against former participants in its training program as well as end its training cost reimbursement policy for all current and future trainees, according to federal court papers cited by AdvisorHub.