Wells Fargo Battles $97M Damage Award for Violation of Break Laws in California

Wells Fargo recently asked a federal appeals court to reduce, or toss, $97 million in damages the bank was ordered to pay to a class of nearly 5,000 home mortgage consultants and private mortgage bankers for violating break laws in California. Wells Fargo argued to the Ninth Circuit Court of Appeals that its California workers did, in fact, receive paid breaks and that a lower court miscalculated the award.

Wells Fargo’s counsel argued that its rest break policies are not unlawful. During 10-minute rest breaks, Wells Fargo employees were allegedly paid $12. Based on this, the company argues that employees were not denied rest breaks.

“Our system gives individuals a paid rest break, conforms to the minimum wage law, and that’s the end of the story,” Wells Fargo’s counsel argued.

If the appeals court refuses to reverse the damages award, Wells Fargo urged it to reduce the award amount.

The original lawsuit was filed in March 2017 and in May 2018. CNN Money reported that a California judge handed down the damages award to benefit mortgage consultants and bankers who worked for Wells Fargo between March 2013 and August 2017. The $97.3 million award was quadruple the $24.5 million Wells Fargo argued that it should owe to their employees.

The bank argued for the lower award based on paying the hourly rate to mortgage consultants and bankers while on break. However, U.S. District Judge Percy Anderson claimed that the higher award was justified by the significant commissions made by Wells Fargo’s employees. These commissions make the hourly rate “essentially irrelevant,” according to the judge.

“Finally, I feel like justice has been served,” a former Wells Fargo employee told CNN Money following the award. “It’s unfair not to pay us properly when we’re essentially working on commission.”

Wells Fargo’s recent appeal claims that the damages award should be dismissed or reduced to $24.4 million based on a $12 hourly rate. Although the company pays additional commission to workers, they argue that the bank shouldn’t be penalized for the extra wages it pays on top of minimum wage.

“We shouldn’t punish a company for giving more compensation,” Wells Fargo’s counsel claimed.

The Wells Fargo Unpaid Breaks Class Action Lawsuit is Jacqueline Ibarra v. Wells Fargo Bank NA, case number 18-55626, in the U.S. Court of Appeals for the Ninth Circuit.

Break Laws in California

Under California break laws, employers are required to give employees a 10 minute paid rest break for every four hours they work. The rest breaks reportedly must be given “as close to the middle of the four hour work period as is practicable.” If it isn’t feasible for a rest break to occur in the middle of a four hour period, the break should be taken at another point in the work period.

If an employer is found to violate break laws in California, they will be forced to pay the employee one hour of their regular rate of pay for each workday that the rest period is not provided to them.

Join a Free California Wage & Hour Class Action Lawsuit Investigation

If you were forced to work off the clock or without overtime pay within the past 3 years in California, you have rights – and you don’t have to take on the company alone.

Get a Free Case Evaluation Now