Week Adjourned: 12.31.16 – Wells Fargo, Behr Paint, Volkswagen

Top Class Action Lawsuits

All is not Well at Wells Fargo? Not by a long shot. Employees from Wells Fargo Bank have filed an employment class action lawsuit alleging they were pressured into unethical sales conduct under threat of retaliation if they failed to cooperate.

Specifically, the Wells Fargo employees claim they were forced to inflate sales figures by opening new customer accounts that customers had not agreed to and to open accounts for non-existent customers. Further, the lawsuit claims that employees who did not engage in this alleged behavior were threatened with discipline or termination. Employees who did participate were rewarded, the lawsuit claims. Read on…

The alleged misconduct involved Wells Fargo employees having to set up a target of eight accounts, or “solutions,” per customer, which is far greater than the industry standard of three accounts per customer. The employees allege that these sales goals were impossible to meet without engaging in underhanded behavior.

The Wells Fargo lawsuit asserts that Wells Fargo’s motive was to increase its stock price by setting unrealistically high sales goals for its employees.

Wells Fargo allegedly aggressively and unlawfully encouraged sales misconduct among its employees by threatening retaliation against workers who refused to engage in the sales misconduct. Those employees were allegedly “routinely counseled, warned, written up, demoted, placed on performance improvement plans, forced to quit, denied promotions, or fired as a result of not meeting sales goals, even though they could have easily met such goals by engaging in Sales Misconduct,” according to the complaint.

The plaintiffs seek to represent a Class encompassing all current and former U.S. employees of Wells Fargo who were subject to the sales goals described in the lawsuit and who were not terminated for engaging in sales misconduct.

Several subclasses have also been proposed in this action, which would represent employees who suffered adverse employment actions for failing to reach sales goals, who reported their concerns about the alleged unlawful sales conduct, or who had their employment terminated or who were let go for reporting or refusing to engage in the alleged misconduct.

The plaintiffs are seeking an award of damages, including two times the amount of back pay for alleged violations of the Dodd-Frank Act and treble damages as applicable under the Racketeer Influenced and Corrupt Organizations Act, or RICO. They also seek reinstatement for eligible Class Members under the Dodd-Frank Act.

Not Painting a Pretty Picture…And another employment suit filed this week—this one by employees of Behr Paint, alleging violations of the Fair Labor Standards Act and California labor law. The defendants are Behr Process Corp., Behr Paint Corp. and Masco Corp.

According to plaintiff Ryan McBain alleges he was employed as a field representative by the defendants and assigned to different Home Depot stores. He claims his responsibilities were answering customer inquiries, replenishing stocks and maintaining store displays. He alleges he was required to prepare time-consuming reports and shuttle between stores and was misclassified as exempt from overtime pay and was not provided with proper meal and rest periods.

In the Behr lawsuit, McBain claims the defendants failed to adequately compensate him for his work as a field representative. The lawsuit also claims that the defendants allegedly failed to keep accurate payroll records of hours worked, meal periods taken, and overtime worked by their employees, refused to pay any overtime compensation to employees for hours worked in excess of 40 hours per week and refused to provide adequate meal and rest periods.

The plaintiff is seeking a trial by jury and seek judgment in his favor, designate collective action, declare misclassification of class members, unpaid wages, liquidated damages, civil penalties, unpaid wages from meal/rest periods not taken, reimburse business expenses, interest, costs and expenses of action, attorneys’ fees and other relief as the court deems just.

FYI – The case is U.S. District Court for the Northern District of California Case number 3:16-cv-07036.

Top Settlements

Meanwhile, North of the 49thVW managed to reach a $2.1 billion settlement in the Canadian class action pending over the so-called Volkswagen and Audi defeat devices that temporarily reduced vehicle emissions enabling the diesel engines to pass regulatory emissions tests.

Additionally, the settlement terms stipulate that Canadian owners of diesel-equipped vehicles made by Volkswagen AG will be able to sell their cars back to the auto maker.

The settlement will cover approximately 105,000 Canadians who bought Volkswagen or Audi vehicles equipped with 2.0-liter diesel engines between 2009 and 2015. Each class member will receive $5,100 to $8,000 in compensation. Class members who decide to sell their vehicles back to Volkswagen Canada will receive a payment in addition to the value of their car.

The settlement is expected to receive final approval from Ontario Superior Court and the Superior Court of Quebec pen in March, 2017, after which class members will receive payouts.

The settlement is valued at $2.1-billion if all eligible owners apply and receive the full amount they are entitled to and all eligible vehicles are traded in. It will be among the largest amounts paid out in a class-action suit in Canada.

That’s a wrap for 2016!!! Happy New Year – to you and yours. See you at the bar.