Wells Fargo is accused of misleading investors with its diversity policy by conducting sham interviews of candidates with no intention of hiring them.
The lawsuit says the company mandated that 50% of interviews involved non-traditional candidates for positions that paid at least $100,000. The policy reportedly considered a person's race or ethnicity, sex or gender, veteran status, sexual orientation, and disability.
But the lawsuit said that the candidates were often brought in for interviews in cases for which managers already had a new hire in mind.
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The plaintiffs said investors were misled as Wells Fargo touted its diversity policy in regulatory filings.
"Meeting the increasingly diverse needs of Wells Fargo’s global customer base is critical to our Company’s long-term growth and success. Wells Fargo values and promotes diversity, equity and inclusion (DE&I) in every aspect of our business," the company said in its 2023 year-end filing. "We are dedicated to recruitment and career development practices that support our employees and promote diversity throughout our workforce, including leadership positions. We developed DE&I principles, which are informed by affirmative action and equal employment opportunity policies, for our Operating Committee."
"This practice can alienate and demean diverse candidates, which also is contrary to Defendants’ stated goals of accomplishing equity and inclusion within the workplace," the lawsuit said. "A reasonable investor would expect a policy that is presented as a method of developing DE&I in the workplace to be implemented in a manner that could accomplish that goal. Instead, per Plaintiffs’ allegations, Defendants implemented the policy in a way that actively moved away from those goals."
Wells Fargo rebutted that its obligation was to interview a diverse pool of candidates. The policy did not involve hiring processes, the company said.
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U.S. District Court Judge Trina Thompson rejected Wells Fargo' request to dismiss the case.
In a statement, Wells Fargo disagreed with the decision.
"Wells Fargo is deeply dedicated to diversity, equity and inclusion and does not tolerate discrimination in any part of our business," the company said in a statement. "The claims in this lawsuit have no merit, and we will continue to defend ourselves against them. Additionally, the United States Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have closed without taking action their investigations regarding the company’s hiring practices related to diversity, as previously disclosed in the company’s 2023 10-K."
Wells Fargo said its U.S. workforce is 53% Caucasian/White and 47% racially/ethnically diverse, as of the end of 2023.