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February 12, 2020 at 03:00 PM
(Photo: Bloomberg)
In a break from standard industry practice, Wells Fargo said Wednesday that it will no longer require arbitration for employees making claims tied to sexual harassment, earning it praise from at least one vocal advocate for women and other underrepresented groups.
“Changing the toxic culture of financial services requires systems level change, and ending forced arbitration is at the top of my list of crucial actions companies must take,” said Sonya Dreizler, founder of Solutions With Sonya and a consultant on sustainable and impact investing. “I’m glad to see Wells Fargo show leadership in this area, and I hope this change is accompanied by internal procedures to help all employees feel safe and welcome at work.”
Wells Fargo’s stance appears to be in sync with how the industry views the matter. In ThinkAdvisor’s survey that followed investment advisor Ken Fisher’s crude remarks at an event in October, 71% of both men and women polled said the industry should end mandatory arbitration in cases of sexual harassment, thus giving employees the right to sue employers.
Most men, 67%, agreed that it should end, while 82% of women said it should. (The poll was completed by about 1,350 financial professionals in late 2019.)
“Wells Fargo has zero tolerance for sexual harassment,” David Galloreese, head of human resources at Wells Fargo, wrote in a post on the company’s internal and external websites. “We believe that this is the appropriate change to make at this time for our employees.”
The bank says it made the decision after “internal dialogue and feedback from various stakeholders.” Last last year, Clean Yield Asset Management submitted a shareholder proposal focused on mandatory arbitration of workplace sexual harassment claims (which it has since withdrawn).
“It’s important to note that this tremendously positive change came about because of shareholder engagement efforts by Clean Yield Asset Management and others,” Dreizler explained. “Shareholder engagement, which is currently under threat at the SEC, is an important tool that can be leveraged to bring positive change to a company and its employees.”
