Wells Fargo's $95M Wage Deal OK'd Despite Objection

Wells Fargo $95M Wage Deal Finalized

Wells Fargo is set to pay $95.7 million to thousands of mortgage consultants who say Wells Fargo violated California law governing meal breaks, after a California federal judge approved the settlement despite an objector’s bid to halt the deal.

U.S. District Judge Beth Labson Freeman signed off on the deal Wednesday despite an objector’s argument that the settlement shouldn’t be approved because it included $25.7 million that the San Francisco-based bank already paid in a consolidated case called Ibarra v. Wells Fargo Bank.

Kirk Fyson argued in September that Judge Freeman needed to enforce the Ninth Circuit’s June 2020 mandate in Ibarra, which ordered the immediate payment of the $24.4 million – the original $25.7 million minus about $1.3 million in interest – to class members such as him who hadn’t opted out of the settlement.

“This court concludes that parties to litigation remain free to settle their disputes after remand, and that such settlement is not barred by the mandate rule,” Judge Freeman said.

Judge Freeman in her Wednesday order also reduced the $32 million attorney fees initially requested to a $21.1 million payment. Judge Freeman determined that granting the workers' counsel with 22% of the settlement fund was the fairest way to reward them of "the exceptional results achieved in this case."

The difference between the first and second attorney fee award will be diverted to the net settlement amount distributed to the class of roughly 5,377 California home mortgage consultants employed by the bank from 2013 to 2019.

Additionally, Judge Freeman approved a $100,000 payment to cover litigation expenses, which remained unchanged from the first proposed settlement, and an $80,000 one to the settlement administrator.

The settlement also will include a $750,000 payment to resolve the claims the workers brought under the Private Attorneys General Act, a California law that allows workers to file wage claims on behalf of the state and other workers with the Labor and Workforce Development Agency.

Of that amount, 25% will be distributed to the class and 75% to the agency.

Named plaintiffs James Kang and Michael Moses also will receive $10,000 each for their involvement in the suit, Judge Freeman said.

Kang and Moses filed separate actions in the California federal court asserting wage and hour claims against Wells Fargo in October 2017 and November 2018, respectively.

The two cases eventually were consolidated in February 2019. Their case was then consolidated with the Ibarra one in March.

Michael Rubin of Altshuler Berzon LLP, which is representing the workers, said Thursday that the settlement sent a "powerful message" to employers throughout the Golden State.

"Take your obligations under the state's meal-and-rest-break laws very seriously, because the penalties for noncompliance can be enormous," Rubin said.

Paul D. Stevens of Stevens LC, which is also representing the workers, said Thursday: "We're greatly appreciative of the court's thoughtful analysis and ruling."

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