Federal Judge OKs Class Action Brought by Former Wells Fargo FAs
A federal judge in New York ruled in favor of class action status for a suit brought by three former Wells Fargo financial advisors claiming the wirehouse failed to pay them overtime, according to news report.
Judge Paul Engelmayer of the U.S. District Court for the Southern District of New York rejected Wells Fargo’s argument that arbitrator Edith Dineen had disregarded the law when she ruled last year that class treatment of the claim should be permitted, Reuters writes.
The arbitrator had said that even though Wells Fargo’s arbitration agreement didn’t explicitly say class arbitration was appropriate, it still allowed for it, according to Bloomberg.
Engelmayer ruled that the agreement failed to limit arbitration to non-class cases, the news service writes.
The three advisors had claimed that Wells Fargo failed to pay their overtime as required by the Fair Labor Standards Act and New York state law, according to Bloomberg.
Their case, and many others, may still be affected by the outcome of a case in front of the U.S. Supreme Court, however, the news service writes.
In October, the court heard oral argument on whether arbitration agreements need to have “magic words” signaling to arbitrators whether class action proceedings have a contractual basis, according to Bloomberg.
“The arbitrator endeavored to apply the appropriate precedents to the agreement at hand, mindful that the lack of definitive Supreme Court guidance inevitably meant a decision in either direction would be subject to some uncertainty,” the court said, according to the news service.