Appeal Denied for Wells Fargo Biased Hiring Class Action Lawsuit

Last week, a three-judge panel unanimously denied an appeal bid for a class action lawsuit that claimed that Wells Fargo’s refusal to sponsor waivers for those with certain criminal backgrounds to work for banks backed by the Federal Deposit Insurance Company (FDIC) disproportionately impacted people of color.

According to the Eighth Circuit panel, Wells Fargo Bank NA did not violate Title VII of the Civil Rights Act in firing or refusing to hire people with criminal convictions, as was alleged by a group of workers.

This ruling supported an initial decision by an Iowa federal court. According to both the Iowa federal court and the appeals court, the decision was a necessity as a sound business decision.

The Wells Fargo hiring discrimination class action lawsuit claimed that Wells Fargo could have exercised its power to waive a federal law that bars people with certain federal convictions from working in FDIC-backed banks. The workers argue that the federal law discriminates against people of color, as they are convicted at disproportionately high rates to white people.

The federal law at issue prohibits “any person who has been convicted of any criminal offense involving dishonesty or a breach,” from working at an FDIC-backed bank. The restriction does not lift based on the time that has passed since the conviction.

People with disqualifying convictions are permitted to seek a waiver from the institution to which they are applying, which would be sponsored by that institution.

Countering this assertion, the three-judge panel says that “we hold that even if Wells Fargo’s policy of summarily terminating or not hiring any … disqualified individual creates a disparate impact, the bank’s decision to comply with the statute’s command is a business necessity under Title VII.”

Additionally, the panel notes that they believed the bank’s decision was sound because banks that are covered by the FDIC do face up to $1 million in fines each day as a penalty for hiring workers with such criminal convictions and have not been officially sponsored.

The panel went on to say that “any bank or other financial institution wisely would prefer for its customers to be served by employees who were not pre[v]iously persons convicted of crimes of dishonesty,” further underlining their position that Wells Fargo’s decision to not sponsor waivers was a reasonable business decision.

The Wells Fargo worker class action lawsuit was spurred by Wells Fargo’s move several years ago to conduct background checks on numerous employees.

These background checks resulted in 136 African American, 56 Latino and 28 white employees losing their jobs.

Background checks were also conducted on prospective employees, and as a result of the background checks, conditional job offers were revoked from 1,350 African American and Latino applicants, and only 354 white applicants.

The workers are represented by James Kan of Goldstein Borgen Dardarian & Ho.

The Wells Fargo Worker Discrimination Class Action Lawsuit is Williams, et al. v. Wells Fargo Bank NA, Case No. 16-4372, in the U.S. Court of Appeals for the Eighth Circuit.