Wells Fargo ends mandatory arbitration in sexual harassment cases

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Wells Fargo announced Wednesday that it will no longer require employees who allege workplace sexual harassment to go to arbitration rather than court.

The $1.9 trillion-asset bank changed its policy after an investment firm that advocates for progressive causes wrote a shareholder proposal focusing on the use of mandatory arbitration in sexual harassment cases. That proposal, submitted in late 2019, has since been withdrawn.

Wells said that its new policy will apply to all future sexual harassment claims.

“Wells Fargo has zero tolerance for sexual harassment,” David Galloreese, the bank’s head of human resources, wrote Tuesday in a message to employees. “We believe that Wells Fargo’s anti-harassment policies and programs are robust, comprehensive, and effectively reinforced throughout the organization.”

In recent years, Microsoft, Facebook, Google, Uber and Lyft have all ended the use of mandatory arbitration for workplace sexual harassment claims. Wells Fargo is believed to be the first big bank to take that step, according to Clean Yield Asset Management, the investment firm that pushed for the policy change.

“This is a win for Wells Fargo’s more than 250,000 employees,” Molly Betournay, the firm’s director of shareholder advocacy, said in a press release. “We urge other companies, particularly other big banks, to follow suit.”

Betournay said in an interview that the use of mandatory arbitration clauses for sexual harassment claims can hide potentially toxic workplace cultures. She also pointed to research that has found victims of harassment receive less monetary compensation in arbitration than they do in court.

Wells Fargo still has a mandatory employment arbitration policy that covers workplace claims other than sexual harassment. This policy generally applies only to employees who were hired after Dec. 11, 2015, according to the bank.

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Sexual harassment Sexual harassment in the professional workplace Wells Fargo Arbitration ESG Workplace culture