by Tyler Durden at ZeroHedge
In the first legal action brought by fired employees of America’s largest mortgage lender and Warren Buffett’s favorite bank – about whose criminal activity he was vowed not to say a word until after the election to avoid bringing attention to Hillary’s hypocrisy of slamming Wells’ illegal tactics even as she accepts support and money from Wells’ biggest shareholder – two former Wells Fargo employees filed a class action in California seeking $2.6 billion from managers who fueled the creation of fake accounts on behalf of workers who tried to meet aggressive sales quotas without engaging in fraud, and were then demoted, forced to resign or fired.
The lawsuit (Polonsky v. Wells Fargo Bank & Co., BC634475, California Superior Court, Los Angeles County ) filed on Thursday, alleged that “Wells Fargo fired or demoted employees who failed to meet unrealistic quotas while at the same time providing promotions to employees who met these quotas by opening fraudulent accounts.”
The lawsuit on behalf of people who worked for Wells Fargo in California over the past 10 years, including current employees, focuses on those who followed the rules and were penalized for not meeting sales quotas. It accuses Wells Fargo of wrongful termination, unlawful business practices and failure to pay wages, overtime, and penalties under California law.
It also offers details of how low-level bankers were allegedly pushed to create at least 10 new accounts a day in a sales initiative that has blown up into a scandal and prompted U.S. lawmakers to call for Chief Executive Officer John Stumpf’s resignation. Bankers were “coached” to secretly open fee-generating accounts and often resorted to using false customer contact information like [email protected] on accounts so they couldn’t be traced back, according to the complaint.
Former employees Alexander Polonsky and Brian Zaghi, who brought the lawsuit, allege Wells Fargo managers pressed workers to meet quotas of 10 accounts per day, required progress reports several times daily and reprimanded workers who fell short. Polonsky and Zaghi filed applications matching customer requests and were counseled, demoted and later terminated, the lawsuit said.
Furthermore, the lawsuit alleges that while while executives at the top benefited from the activity, they blamed thousands of $12-per-hour employees who tried to meet the quotas and were often required to work off the clock to do so. Understandably, they are now angry and want nearly $3 billion in damages.
“Employees with a conscience who tried to meet quotas without engaging in fraud were the biggest victims, losing wages, benefits and suffering anxiety, humiliation and embarrassment”, the lawsuit said.
Wells Fargo was aware many accounts were illegally opened, unwanted, carried a zero balance, or were simply a result of unethical business practices, the lawsuit said.
“Wells Fargo knew that their unreasonable quotas were driving these unethical behaviors that were used to fraudulently increase their stock price and benefit the CEO at the expense of the low-level employees,” the bankers alleged in state court. “Although this policy was known to top executives of defendants, plaintiffs, as bankers, were blamed for harm to clients and retaliated against.”
Cited by Bloomberg, Jonathan Delshad, the plaintiffs’ attorney, said in the complaint that bank managers often handed employees blank account forms with an unknown signature at the bottom and the bankers were expected to fill out the forms, adding as many accounts as they needed to meet their quotas.
“It could have been a customer’s signature, it could have been their manager’s — they had no way of knowing,” Delshad said in an interview. “One of those customers was an exchange student making $300 a week who had four accounts, including two with negative balances.” Delshad said his clients are no longer Wells Fargo employees and that one is now a real estate agent. A LinkedIn profile for Zaghi shows him working for Marcus & Millchap in commercial real estate in the Los Angeles area.