Wells Fargo has clarified how it will implement its new policy in which employees are no longer required to arbitrate claims tied to sexual harassment, a break with the practices of most large companies.
“Our employees will not be required to ‘opt out’ or take any other affirmative action. They will be able to file any future sexual harassment claims in court effective immediately,” a spokesperson said in a statement shared with ThinkAdvisor.
This measure is important, says financial advisor Rachel Robasciotti, CEO of Robasciotti & Philipson and a co-founder of the impact investing platform RISE (Return on Investment & Social Equity), which helped form the Force the Issue project in September 2019 to end mandatory arbitration for sexual harassment.
“We say that opt-outs, waivers and other forms of affirmative action are not in the best interest of employees,” Robasciotti explained in an interview. “It’s not a good way to [be given] the legal right of non-arbitration, … since [it often means] employees have to sign a separate form in which they affirmatively say ‘I want to take you to court’” in cases of sexual harassment.
As for the broader significance of Wells Fargo’s new approach to sexual harassment claims for the financial industry, “We have achieved momentum,” the advisor said. “Business leaders that do not do this are going to be left behind.”
She pointed to recent steps taken by BlackRock as an example of how companies in financial services are moving in the right direction. The asset manager fired two top officials for violating the company’s policy on work relationships in July and December of last year.
BlackRock also does not have mandatory arbitration or opt-in/affirmative action measures that must be taken regarding claims of sexual harassment, according to Force the Issue’s database. “They let us know when we reached out that they do not have [such policies] and went public with it,” Robasciotti said.
“It takes these cornerstone institutions doing what’s right to take a stand and to break the gridlock,” she added.