Wells Fargo to Avoid Advisor Lawsuit with $9.5 Million Payout
Wirehouse Wells Fargo is apparently settling an advisor pay dispute for $9.5 million, Law360 reports. The payment ends a class action alleging the wirehouse didn’t pay some advisors commissions on time or properly reimburse them for expenses.
Almost 2,200 current and former reps will receive on average $2,783 net of fees and costs, the legal news website reports.
The payment would end assertions that the wirehouse broke California labor laws.
According to the suit, Wells Fargo pays its advisors every two weeks — 26 paychecks a year — with the second monthly check including commission earned the month previous.
“Wells Fargo contends that this timing is lawful, because the wages are paid in the pay period following that in which they are earned and that it would be administratively impractical to pay the amounts sooner,” Law 360 quotes the proposal as saying.
“Wells Fargo further contends that financial advisors have the option to receive payments in advance of this pay schedule based on estimates, and relatively few financial advisors select this option,” the settlement document continued, according to Law360.
But the advisors claimed that the payment practice broke labor laws and effectively delayed their remuneration unfairly.
The advisors filed suit in 2014, originally also contending that Wells Fargo had broken the Fair Labor Standards Act. In February 2016 a California federal judge rejected claims the wirehouse violated the FLSA; however, several surviving claims persisted. The current settlement proposal addresses these claims.