Wells Fargo agreed to an $85 million settlement this week amid claims that it had held ‘fake’ job interviews to hit diversity targets. The lawsuit was filed by SEB Investment Management and accuses the financial giant of meeting with such candidates without any intention of hiring them. The company has maintained its innocence and insisted that the settlement was to avoid a continued financial toll from legal proceedings.
According to reports, the “sham interviews” were held between February 2021 and June 2022 for certain higher-paying roles. Another candidate had already been selected for the roles when many of these meetings took place. Investors had taken action against the bank after media reports highlighted the issue and sent stock prices plummeting in 2022.
“We believe the claims were without merit. Wells Fargo does not tolerate discrimination in any part of our business…We are pleased to have reached a settlement,” Wells Fargo had previously said in a statement.
What is the case?
The alleged practices had come under scrutiny in May 2022 after media organisations spoke to Wells Fargo employees. Former executive Joe Bruno told the New York Times that certain job interviews handled by his unit followed this problematic pattern — with so-called “diverse” candidates being interviewed for jobs that had already been promised to another person. He had reportedly complained to his bosses but the claims were dismissed. Bruno was eventually fired in August 2021 with Wells Fargo claiming it was due to his combative behavior with another employee.
Seven employees had corroborated the allegations in conversation with NYT — with some adding that they were instructed by bosses and HR managers to interview “diverse” candidates even though the job decision had already been taken. Five others had told the publication that they were aware of the practice or helped to arrange it. They said the practice seemed primarily about helping the company record its diversity efforts on paper (perhaps for a potential audit) than to hire women or people of colour.
Wells Fargo has continued to deny the allegations and insists that its settlement decision was reached to avoid the continued burden of legal proceedings. The class-action lawsuit was launched by investors after the revelations sent stock prices plummeting. The company had reportedly seen its stock price fall by 10% after news of the fake interviews broke — leading to a loss of nearly $17 billion in market value.