To settle a class action lawsuit against Wells Fargo, a deal has been proposed to divide $5.6 million among about 135 brokers. The suit was brought by two brokers who formerly worked at Wells Fargo Advisors LLC, and the case may be of interest to individuals and companies with complex employment agreements involving bonuses and other benefits.
Both employees who brought the class action left Wells Fargo before 2012 and started working for other firms. One broker went to UBS AG, and the other went to Morgan Stanley. However, a policy in Wells Fargo's compensation plan required the brokers to forfeit bonuses that had been deferred to the brokers' retirement plans. According to the policy, the forfeiture would apply if the employees went to work for competitors.
Court documents indicate that the brokers had to meet certain performance goals to earn the bonuses, and the plaintiffs claimed that Wells Fargo's forfeiture provision violated state laws specifically in California and North Dakota.
Pending court approval, Wells Fargo will settle the claim with a payout of $7.4 million, $1.9 million of which will go toward legal fees and other costs. The rest will be shared by brokers in North Dakota and California.
According to Reuters, the settlement document further indicates that the forfeiture policy in question has not been imposed since 2012, and Wells Fargo doesn't plan to impose the policy going forward.
If you have questions about your own employment and non-competition agreements, then an attorney with experience in this area of law can look into your case and explain your options. If the policy in question applies in multiple jurisdictions, then it is especially important to seek counsel from a firm with experience in numerous states.