Morning Business Outlook: Former Wells Fargo CEO John Stumpf has been banned for life from the banking industry and must pay $17.5 million in fines; Tinder adds new features to protect people from dangerous dates and fake profiles.
Embattled banking giant Wells Fargo announced Wednesday it would end its mandatory arbitration requirement for employees reporting claims of sexual harassment.
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Mandatory arbitration is a form of dispute resolution that requires the parties involved attempt to resolve the matter with a private arbitrator instead of in a public forum.
“Wells Fargo has zero tolerance for sexual harassment,” David Galloreese, head of Wells Fargo Human Resources, said in a message to employees. “Following internal dialogue and feedback from various stakeholders, including the proponents of a shareholder proposal, we have decided that, effective immediately, Wells Fargo will not require arbitration for employees in connection with any future sexual harassment claims.”
The changes were made after a shareholder proposal was submitted late last year.
The policy had generally applied to employees hired since the end of 2015, the bank said.
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In 2016 Wells Fargo came under fire for opening millions of accounts for customers, which they did not know of nor request, as employees came under intense pressure to meet sales targets. More than 5,000 employees were fired as a result.
As previously reported by FOX Business, the Office of the Comptroller of the Currency announced charges against five of the bank’s former executives last month for their connection to the bank’s sales practice misconduct. At the same time, it also issued a civil money penalty of $17.5 million against former CEO John Stumpf and barred him from working in the banking industry for the remainder of his life.
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The company’s new CEO, Charles Scharf, detailed reform plans on Tuesday – with aims of providing more oversight to different units of the bank.
