Can Employers Ban Class Actions? Supreme Court to Decide

“Class action waivers may be one of the most important issues facing workers today.”

The Supreme Court announced on Friday that it will review whether or not class action waivers violate national labor laws. Companies frequently include these waivers in arbitration agreements to prohibit employees from forming class action lawsuits. For years though, district and appellate courts have disagreed on whether or not the practice is legal.

“Class action waivers may be one of the most important issues facing workers today, and many are unaware it is such an issue,” said attorney C. Ryan Morgan, co-chair of Morgan & Morgan’s Employee Rights Group. “Class action waivers are detrimental to the vast, vast majority of workers and hinder workers from having knowledge of their rights.”

40% of Employers Use Class Action Waivers

“Most workers would be shocked if they knew that many employers force workers to sign these agreements.”

Arbitration agreements and class action waiverswhich are usually buried deep within an employer’s contractrequire employees to handle their legal disputes in private arbitration, without a judge or jury. Employers prefer arbitration because proceedings are faster and are less costly than typical lawsuits. And, companies are more likely to win.

In arbitration, companies set the rules of proceedings and hire the arbitrator. A Cornell University study found that out of nearly 4,000 workplace arbitration cases filed between 2003 and 2007, only 21% were awarded in favor of employees. And, on average, employee litigation awards were 5 to 10 times greater than arbitration awards.

Employees are usually unable to opt out, and some courts, like the Sixth Circuit, have ruled that by simply showing up to work, an employee has agreed to the arbitration terms.

Favorable court decisions have only encouraged the practice. In 2015, about 40% of employers used class action waivers in their arbitration agreements.

“Most workers would be shocked if they knew that many employers force workers to sign these agreements and certain courts enforce the agreements,” said Carlos Leach, an employee rights attorney for Morgan & Morgan.

Class Action Waivers May Violate the National Labor Relations Act

Stephanie Sutherland was told that pursuing her case in arbitration would cost her $200,000.

Agencies like the National Labor Relations Board (NLRB) argue that class action waivers violate the National Labor Relations Act (NLRA) because they strip away employees’ rights to collective action. Employers, however, often argue that the Federal Arbitration Act, which permits class action waivers, trumps the NLRA.

The Supreme Court will decide whether or not the NLRB’s interpretation is correct by reviewing three cases involving Murphy Oil, Epic Systems, and Ernst & Young.

Epic Systems and Ernst & Young are appealing decisions made by the Seventh and Ninth Circuits respectively that declared their class action waivers were illegal. The Chicago and San Francisco-based appellate courts were the first to rule against class action waivers in 2016.

For smaller disputes, a class action lawsuit is usually the most cost-effective legal method since plaintiffs can share legal costs. Stephen Morris and Kelly McDaniel are fighting for their right to form a class action lawsuit against Ernst & Young, whom they allege withheld overtime pay from employees. 

In a similar case filed by another former Ernst & Young employee, Stephanie Sutherland was told that pursuing her case in arbitration would cost her $200,000. Though a New York federal court overrode the class action waiver since arbitration fees would prevent her access to the courts, it was later reversed by the Second Circuit Court of Appeals.

Employee Rights Advocates Are “Cautiously Optimistic”

“I am cautiously optimistic that the [Supreme Court] will do the right thing and side with the NLRB.”

Experts caution that the possibility of a 4-4 split and the looming justice vacancy far from guarantees a decision in favor of class action rights.

However, the Supreme Court announcement comes on the heels of President Obama’s Fair Pay and Safe Workplaces executive order, which rules that companies with federal contracts of $1 million or greater cannot require employees to sign arbitration agreements. And, last year, the Senate introduced the Restoring Statutory Rights Act, which would prohibit arbitration agreements that violate employee discrimination laws.

“As an attorney who constantly fights against these agreements on behalf of employees, I am cautiously optimistic that the [Supreme Court] will do the right thing and side with the NLRB’s position that class action waivers violate workers’ fundamental rights to join together versus their employer,” said Carlos Leach.

Opening briefs are scheduled to begin in February; a decision will likely be made sometime this summer.

 

Lawsuits Slam JCPenney, Macy’s for Duping Consumers

You know what they say: “If it sounds too good to be true, it probably is.”

The lawsuits allege that these department stores listed misleading “original prices” on products so they could offer false discounts.

Lending further weight to that adage, the city of Los Angeles has filed several lawsuits against JCPenney, Macy’s, Kohl’s, and Sears, alleging that the department stores listed misleading “original prices” on products so they could slash them, luring in customers with false discounts.

For example, Kohl’s listed a strapless dress with an “original price” of $50, on sale for $35 and then $15. According to the lawsuit, the dress was never actually sold for $50.

This deceptive tactic is called “false reference pricing,” and companies do it because it works. Here are some other alleged examples cited in the complaints:

  • Macy’s sold a men’s V-neck t-shirt for $19.99, supposedly down from a $29.50 list price, a price at which the shirt was never actually sold.
  • Sears sold a Kenmore front-loading washing machine at $999.99, nearly $200 cheaper than its “list price” of $1,179.99. The washer was never sold at that price, and later went for as low as $650.
  • JC Penney marketed a maternity bathing suit top as $15 off its original price of $46. The price then dropped from $31 to $22, and then $15, just one-third the “original price.” One problem: the top was allegedly never sold for $46.

In a statement, City Attorney Mike Feuer said, “Customers have the right to be told the truth about the prices they’re paying—and to know if a bargain is really a bargain.”

Unfortunately, distinguishing true discounts from phony ones is harder than ever.

Hold Retailers Accountable

Brick-and-Mortar Stores Desperate for Deals

 This isn’t the first time these companies have faced litigation for misleading consumers. JCPenney and Kohl’s both faced similar claims in 2015, and both settled those class action lawsuits for sizable sums: JCPenney settled its suit for $50 million, and Kohl’s settled its claims for $6 million.

Ron Friedman, a Los Angeles-based retail expert, tells the Los Angeles Times, “There is no regular-priced merchandise, especially in stores like Sears or Kohl’s or TJ Maxx. The whole category is all about the sale price.”

Mr. Friedman says these kinds of brick-and-mortar stores are struggling to compete with online retailers, so they rely heavily on amazing deals and sales to lure customers away from sites like Amazon, Wayfair, and Overstock.

According to TruthInAdvertising.org, there were 24 of these kinds of lawsuits filed just in the first half of 2016, against retailers like Macy’s, J. Crew, Gymboree, Ann Taylor, and Ralph Lauren. (In all of 2015, there were 25 such suits.)

Of course, as anyone who shops online knows, false reference pricing is not limited to brick-and-mortar stores.

Amazon Begins Phasing Out List Prices

Seemingly every product on Amazon is (or was) on sale, often at incredible savings—75% or hundreds of dollars off the “list price.” How is this possible? Well, because like the “original prices” at JCPenney and Kohl’s, all too often the item was never actually sold with such a hefty tag.

If everything is always on sale, then nothing is ever on sale.

In the wake of criticism about its pricing—and perhaps to avoid the rash of lawsuits vexing other companies—earlier this year Amazon started phasing out its list prices. In place of List Prices, many if not most items now just say “Price.” Presumably (ideally), this is a more accurate reflection of the product’s cost.

Amazon still has deals, of course. But the gradual elimination of list prices suggests we may not see the ubiquitous, unbelievable discounts to which we’ve become accustomed—and, arguably, desensitized. As TruthInAdvertising’s executive director Bonnie Patten pointed out to the Times, if everything is always on sale, then nothing is ever on sale.

Instead of emphasizing discounts from original or list prices, on their Amazon Wish Lists customers now see if the price of an item has dropped since it was added to the list. This is a clever way for Amazon to have its cake and eat it too: it has managed to have perpetual “deals” occur without deceiving consumers.

If only JCPenney, Macy’s, Sears, and Kohl’s could do the same.

Samsung’s Exploding Washers Leave Consumers Rattled

At this point, the word “Samsung” is almost synonymous with “explosive.”

Samsung has received 733 reports of the washers malfunctioning.

Right on the heels of its massive Samsung Galaxy fiasco, last month the Korean electronics giant recalled nearly three million washing machines over hundreds of reports of the machines vibrating excessively and even firing their tops off.

The recall—which Samsung announced more than a month after the Consumer Product Safety Commission (CPSC) warned consumers of the washer risks—impacts 34 models encompassing 2.8 million machines. (For a full list of affected models, see the official CPSC page.) Samsung says it has received 733 reports of the washers malfunctioning, and at least nine reported injuries.

The CPSC page says injuries include “a broken jaw, injured shoulder, and other impact or fall-related injuries.”

Though the recall offers consumers either a free in-home repair or rebate to be used toward a new washer, many aren’t satisfied with Samsung’s response.

Consumers Get “Market Value” for Broken Machines

Unless a consumer purchased a washer after October 6, 2016, he or she has two options:

(1) A free in-home repair of the busted machine, which includes a one-year extension of the product’s warranty, or

(2) A rebate applied to the purchase of a new machine, plus a free installation of that machine and free removal of the old one.

At first glance, this sounds like an okay deal (especially #1). But many consumers have complained about delays in their machine repairs, or not even being able to reach Samsung.

Meanwhile, the rebate in the second option will be for the broken washer’s “current market value,” which naturally will be much lower than it was upon purchase. (Washing machines are like cars: their values plummet as soon as you take them home.)

So, Samsung is offering consumers either a partial refund/rebate for a defective machine that Samsung produced and marketed—or, a repair that has been plagued by delays.

It’s no wonder so many people are heading to court to hold Samsung accountable.

Samsung Faces Multiple Class Action Lawsuits

Way back in March, Suzann Moore and Michelle Soto Fielder filed a class action lawsuit against Samsung, alleging that their washers blew their tops. Ms. Moore said that after two uneventful years, her machine “violently exploded” in December 2015.

The complaint, filed in New Jersey (where Samsung U.S.A. is headquartered), also contends that Ms. Fielder’s machine blew up in February 2016 “with such ferocity that it penetrated the interior wall of her garage.” As with Samsung’s Galaxy phones, there are numerous YouTube videos that appear to show these devices post-explosion.

In the town of Trail, British Columbia, a man filed a lawsuit against Samsung not over physical damage or injuries, but because allegedly the rebate offered by Samsung fails to fully compensate consumers.

For example, a woman who joined the Canadian lawsuit, Brandy Robertson, received only a $410 rebate for a machine that originally cost her $900. Ms. Robertson also said she had to pay a $200 delivery fee for the new machine.

She told CTV News in Vancouver, “They should be replacing full cost of the top loaders… I think they are making money off of their recall.”

If you or a loved one have suffered physical or financial damage because of a faulty Samsung washing machine, contact us today to learn your rights.

Comcast’s Hidden Fees Could Be Illegal

A new class action lawsuit filed in the Northern District of California on October 15, 2016 alleges that Comcast’s notorious hidden fees constitute false advertising. Among the other charges in the 76-page complaint:

  • Comcast falsely advertised its cable TV service at flat monthly rates when it intended to charge more than promised via a Broadcast TV Fee and/or a Regional Sports Fee.
  • Comcast did not adequately disclose and describe these fees to plaintiffs.
  • Comcast’s representation of these fees on customers’ bills was deceptive.
  • Comcast breached its own contracts by charging these fees.
  • Comcast failed to give adequate notice to plaintiffs before increasing fee amounts.
  • Comcast misled and lied to customers about the nature and purpose of its fees.
  • Comcast breached the implied covenant of good faith and fair dealing with customers.

Though Comcast requires all customers to agree to an arbitration clause (as part of their service agreements) that ostensibly forbids them from taking the cable giant to court, the complaint argues that this clause is “unconscionable, illusory, and unenforceable,” and that plaintiffs were not informed of the clause and/or did not agree to it.

Cable_Satisfaction_Ratings

In response, Comcast will likely point not only to the arbitration clause but to the fact that its “hidden” fees are usually noted in the fine print of advertisements and bills.

(That fine print helps explain why the cable industry is one of the most hated in America, along with airlines—though these aren’t the only ones whose actual prices dwarf their advertised ones.)

Comcast may have the law on its side, but it certainly won’t have public opinion in its corner—or the Federal Communications Commission (FCC).

FCC Fines Comcast $2.3 Million for Shady Billing Practices

Just days before the class action was filed, the FCC hammered Comcast with a $2.3 million fine for charging customers for equipment and services they hadn’t requested or authorized. In many cases, customers had even rejected the service offers when speaking to Comcast reps.

 

The FCC’s Enforcement Bureau chief, Travis LeBlanc, said in a statement:

“It is basic that a cable bill should include charges only for services and equipment ordered by the customer—nothing more and nothing less. We expect all cable and phone companies to take responsibility for the accuracy of their bills and to ensure their customers have authorized any charges.”

The practice of “negative option billing”—charging customers for services or equipment they never asked for—is rampant in the cable industry, among others. Though Comcast acknowledged its bills could have been clearer and its customer service better, it denied any wrongdoing or even “problematic policy.”

In a statement, the company said the FCC simply found “isolated errors or customer confusion.”

WA Attorney General Sues Comcast for $100 Million

If the billing and customer service practices cited above are just isolated errors, they bear a striking resemblance to the ones outlined by Washington State Attorney General Bob Ferguson.

In August 2016 Mr. Ferguson filed a $100 million lawsuit against Comcast, alleging the company violated the state’s Consumer Protection Act (CPA). Among that complaint’s charges:

  • Comcast duped 500,000 consumers into paying $73 million in subscription fees for a supposedly comprehensive “protection plan” that actually does not cover the vast majority of wiring work done at consumers’ homes.
  • Comcast hit subscribers with fees for service visits related to malfunctioning Comcast equipment and networking errors. (Despite the company’s guarantee: “We won’t charge you for a service that results from a Comcast equipment or network problem.”)
  • Comcast authorized service technicians to charge for work that should be performed for free.
  • Comcast performed thousands of unauthorized credit checks on customers, negatively impacting their credit scores.

Comcast’s policy states that customers with good credit scores can waive the deposit fees. At least 6,000 times, though, customers opted to pay the deposit fee—only to have Comcast check their credit anyway.

“This case is a classic example of a big corporation deceiving its customers for financial gain.”

In his press release announcing the lawsuit, Mr. Ferguson stated, “This case is a classic example of a big corporation deceiving its customers for financial gain. I won’t allow Comcast to continue to put profits above customers—and the law.”

If you have been the victim of false advertising and/or deceptive billing practices, contact us to learn your rights. You may be entitled to compensation for financial losses and other damages.

Tyson Foods in Hot Water After Price-Fixing Conspiracy

Tyson Foods has never had a saintly reputation, but that hasn’t stopped it from growing into a poultry powerhouse and America’s largest producer of meats. In 2015, Tyson Foods raked in $41 billion in sales.

But several major scandals, a slew of class action lawsuits, one damning report from Pivotal Research, and another from Oxfam have left investors scattering.

Since September 22, Tyson’s share price has dropped from $76.76 to $70.67 (as of this writing), at times bottoming out at $67.75—its largest dip in six years. Meanwhile, the Supreme Court and a U.S. District Court in Iowa recently upheld a $6 million award for Tyson employees who hadn’t received full pay for their labor.

If the new antitrust charges stick, those financial blows could be just the beginning.

Fight for Your Employee Rights

Chicken Makers in Cahoots?

On September 2, 2016, New York-based Maplevale Farms filed an antitrust lawsuit in Illinois alleging that the $30 billion poultry industry had hatched a scheme in 2007 to inflate and fix chicken prices. That class action has since spawned five others, which will likely be consolidated into a multi-district litigation (MDL) later this year.

Of course, if the Justice Department deems this a legitimate antitrust case, they could take the reins of the lawsuit.

Source: Bloomberg
Source: Bloomberg

Among the 14 defendants are Tyson, Perdue Farms, Pilgrim’s Pride, Sanderson Farms, and Simmons Foods. The lawsuit claims that Big Chicken jointly agreed to limit production (in some cases by simply killing off chickens early) and raise prices on chicken.

The complaint says this was a coordinated, industry-wide effort facilitated in part through a data service called Agri Stats, which allows these companies to track each other’s propriety information.

Since 2007, chicken prices—which historically fluctuate over time—have risen steadily.

Peter Carstensen, a former antitrust lawyer for the Justice Department, tells Bloomberg, “It makes sense to cut back production if, and only if, your competitors cut back, too.”

Mr. Carstensen seems bullish on the antitrust lawsuit, saying, “You’re asking the court to infer collusion. With Agri Stats, those meetings, and then, if you can line up the conduct to show reasonable uniformity, that would pretty much do it.”

Pivotal Report Reverberates on Wall Street

Like Peter Carstensen, Tim Ramey—a stock analyst for the Pivotal Research Group—feels that “the narrative of this suit fits the fact-pattern of poultry pricing and margins over the past seven years.”

“The narrative of this suit fits the fact-pattern of poultry pricing and margins over the past seven years.”

On October 7, Mr. Ramey urged investors to sell their Tyson stock. He also lowered its target share price by 60%, from $100 to just $40. Investors listened: Tyson’s price plummeted that day by nearly 10%.

Mr. Ramey called the lawsuits “powerfully convincing” and wrote, “If [the allegations are] true, it explains a lot. It explains why Tyson can offer EPS guidelines with remarkable precision; boasting of margins at record levels well into the future.”

Unfortunately for Tyson, these antitrust suits are not the only class actions threatening its business.

Fight for Your Employee Rights

Courts Uphold $6 Million Verdict

In March the Supreme Court voted 6-2 to uphold a $5.8 million award for Tyson workers in Storm Lake, Iowa who had not been paid for the time spent at work donning and removing protective gear: a clear violation of the Fair Labor Standards Act (FLSA).

Tyson wanted the case thrown out, claiming there was not enough evidence to determine the damages owed each worker. According to Mother Jones, the company also wanted

the court to issue a broad ruling that would effectively immunize it against future class actions for wage and hour theft, and make it much harder for workers everywhere to join together to bring such claims. If it wins this case, Tyson could have it both ways: It could effectively continue to violate the FLSA and escape liability for it in court.

Thankfully the Supreme Court did not let that happen. But Tyson didn’t stop there: in June, the company asked the U.S. District Court in Sioux City, Iowa for a retrial. Judge John Jarvey denied that appeal.

It looks like Tyson will just have to pay its workers what they’re owed—which is the least it can do, given how the company allegedly treats them.

Tyson Employees Wear Diapers to Work

The Iowa case is not the first time Tyson employees have described abuse. In May, Oxfam America released a report titled “No Relief” which detailed myriad human rights violations by Tyson Foods, Pilgrim’s, Perdue, and Sanderson Farms.

The report alleges that poultry workers “earn low wages, suffer elevated rates of injury and illness, toil in difficult conditions, and have little voice in the workplace.”

Incredibly, Oxfam also writes that, due to long hours and a lack of adequate bathroom breaks,

Workers urinate and defecate while standing on the line; they wear diapers to work; they restrict intake of liquids and fluids to dangerous degrees; they endure pain and discomfort while they worry about their health and job security. And they are in danger of serious health problems.

“The vast majority of workers report a lack of adequate bathroom breaks,” the report says.

Tyson denied Oxfam’s claims, while the National Chicken Council questioned their validity given the workers’ anonymity.

But if the “No Relief” report is true, Tyson could soon have yet another class action lawsuit on its hands.

A Timeline of Monsanto’s Roundup Controversy

Monsanto is no stranger to controversy. This is the company that brought us Agent Orange, an herbicide deployed during the Vietnam War that wound up traumatizing both the Vietnamese and our own troops. (Monsanto would later reach a $180 million settlement with Vietnam vets over diseases like leukemia, Hodgkin’s disease, non-Hodgkin’s lymphoma, Parkinson’s disease, and respiratory cancer.)

Hold Monsanto Accountable

In 1974, four years after the U.S. stopped using Agent Orange, Monsanto introduced Roundup (glyphosate)—another powerful herbicide that quickly became a mainstay on most American farms.

But like Agent Orange, Roundup would be linked to cancer. This herbicide, too, could wind up costing the company millions due to lawsuits.

1996

monsanto-info_large

Monsanto patents and releases Roundup-Ready seeds, which are genetically modified to withstand the ubiquitous Roundup herbicide. (These seeds/crops are known as GMCs: genetically modified crops.) This allows farmers to kill weeds (in the short term, at least) without also dooming their own crops.

Over the next 20 years, Roundup-Ready crops will come to dominate their respective markets, eventually reaching a 90% share.

Thanks to the Roundup-Ready patent and relevant legal protections—and Monsanto’s aggressive acquisitions of its competitors—some argue that Monsanto has a monopoly on the biotech industry. (Without question, it is the largest biotech company in the world.)

2009

The Oscar-nominated documentary Food, Inc. is released on June 12. The film shows Monsanto in a harsh light, portraying the company as mobilizing an army of attorneys to bully farmers into using their Roundup-Ready soybeans—and suing those who won’t cooperate.

Importantly, the film emphasizes that the Roundup-Ready seeds are “terminating” seeds. That means farmers can’t replant them; instead, they must go back to Monsanto to buy more seeds whenever they run out.

Food, Inc. inflicts so much damage on Monsanto’s reputation that the company creates several pages on its website just to respond to the charges lobbed in the film.

2013

Entropy—a peer-reviewed scientific journal based in Switzerland—publishes a study that concludes

glyphosate enhances the damaging effects of other food borne chemical residues and environmental toxins. Negative impact on the body is insidious and manifests slowly over time as inflammation damages cellular systems throughout the body.

According to the study, one of the consequences of this negative impact is cancer.

Hold Monsanto Accountable

2015

In March, the International Agency for Research on Cancer, or IARC (part of the World Health Organization, or WHO) assesses the potential cancer-causing (carcinogenic) effects of glyphosate (Roundup). It determines that glyphosate is “probably carcinogenic to humans.”

That fall, plaintiffs file the first of at least 25 lawsuits against Monsanto over Roundup’s allegedly cancer-causing effects. Many plaintiffs, like Yolanda Mendoza, just sprayed Roundup on their yard every week.

Ms. Mendoza, a mother of three, contracted Non-Hodgkin’s Lymphoma in 2013. (After intensive chemotherapy, her cancer is currently in remission.)

“What everyone has in common is that they all used Roundup and they all have non-Hodgkin’s lymphoma.”

Her attorney Robin L. Greenwald tells CBS News, “Some people are landscapers, some people are migrant farm workers, some people are farmers. What everyone has in common is that they all used Roundup and they all have non-Hodgkin’s lymphoma.”

For the year, Monsanto rakes in $4.75 billion in herbicide sales.

2016

In April, the Journal of Occupational and Environmental Medicine (JOME) publishes a study that concludes that herbicides like glyphosate are “associated with a high risk of cutaneous melanoma” (skin cancer), “in particular among those exposed to occupational sun exposure.”

In September, pharmaceutical giant Bayer AG announces it will buy Monsanto for $66 billion, raising serious concerns about rising prices for farmers. (This is the second massive merger of the year after the Dow-DuPont deal.)

Later that month, the U.S. Food and Drug Administration (FDA) finds trace amounts of Roundup in various oatmeals, cereals, and baby foods.

The next month, federal judges consolidate 21 Monsanto Roundup lawsuits into a multi-district litigation (MDL) in the Northern District of California.

TODAY

If you or a loved one contracted cancer after using Roundup, please contact us today to explore your legal options. Our firm is one of the most successful consumer protection firms in the country, with more than 300 attorneys and a support staff of 1,500. We have a history of standing up to bullies and have never represented a large corporation—that’s why our motto is “For the People.”

We may be able to help you get relief for medical bills, lost wages, pain and suffering, and other expenses. Don’t wait; these lawsuits are time-sensitive, and you may be owed compensation.

Wells Fargo Under Fire for Bogus Accounts Scandal

Wells Fargo must pay $185 million in fines for secretly opening unauthorized debit and credit card accounts for customers in a scheme engineered to boost stock prices and executive pay.

The money will go to the Consumer Financial Protection Bureau, the City and County of Los Angeles, and the Office of the Comptroller of the Currency. Also in line to receive restitution are the victims of the scheme, who had accounts unwittingly opened in their names.

Hold Wells Fargo Accountable

But while governments and consumers have scored a victory in the scandal’s resolution, there has been no financial relief for Wells Fargo employees claiming they were fired or demoted for playing by the rules and not opening secret accounts to meet sales quotas.

“Cross-Selling” Goes Back to at Least 2002

Federal regulators say Wells Fargo employees opened 1.5 million bank accounts and applied for 565,000 credit cards without customers’ permission. The bank has fired more than 5,000 employees involved in the scheme.

During a Senate Banking Committee hearing, Wells Fargo CEO John Stumpf defended the bank’s publicly stated goal of opening eight accounts per customer, whch it calls “cross-selling.” Wells Fargo set the goal of eight accounts as early as 2002, according to a Public Citizen report.

Stumpf earned $19.3 million in 2015 as the company’s stock became a Wall Street favorite. Wells Fargo is currently the most valuable bank in the world.

“Cross-selling is shorthand for deepening relationships,” he told the Committee.

Stumpf said Wells Fargo fired workers between 2011 and 2015 for the sales practices in question, but also said the issue didn’t reach the board level until 2013. He claims he wasn’t personally aware of the extent of the problem until 2015.

He maintained there was no orchestrated deception by Wells Fargo, and that the 5,300 employees it fired for creating false accounts were acting independently.

But this explanation does not square with the claim made by regulators and former workers that Wells Fargo employees were encouraged to open the unauthorized accounts through a compensation scheme that awarded them for increasing their cross-sale numbers.

Former Wells Fargo Workers Sound Off

Dennis Russell, a telephone banker with Wells Fargo in Orange County, California for five years, said he was fired in 2010 for not meeting sales quotas. He told the New York Times that he couldn’t legitimately offer banking products to the customers he spoke with because many of them were already behind on their mortgages, credit cards, and cars.

“They established the culture that made this happen—it comes down from the top.”

Russell lost his home after losing his job with Wells Fargo. He scoffs at John Stumpf’s claim that the bank did not encourage fraudulence in the pursuit of cross-sale quotas.

“It’s a crock,” Russell said. “They established the culture that made this happen—it comes down from the top.”

Christopher Johnson told the Times he was fired from Wells Fargo in 2008 after a five-month stint as a business banker for refusing to go along with pressure from his manager to open accounts for his friends and family, even if he didn’t have their permission to do so. He reported his concerns to the company’s ethics hotline and was fired three days later for “not meeting expectations.”

Johnson lost his home and possessions and spent the better part of a year living out of his truck.

Hold Wells Fargo Accountable

The Wells Fargo scandal is just the latest example of executives at major companies concocting schemes that benefit them at the expense of low-level employees.

If Wells Fargo will not do the right thing and compensate the real victims of its fraud—the employees that were fired for not engaging in unethical business practices—it is up to the workers themselves to demand justice.

If you are a former Wells Fargo employee who refused to set up accounts without customers’ knowledge and were punished for it, we would like to hear from you. Contact us for a free, confidential case review.

Often the lead class action plaintiff receives extra compensation for his or her role in the case.