Wells Fargo Pays $7.4 Million to Settle Bonus Lawsuit
From the Desk of Jim Eccleston at Eccleston Law Offices:
Wells Fargo Advisors has agreed to pay $7.42 million to settle a class action claim that the firm wrongly withheld incentive compensation from two former advisers and a certified class.
According to the compliant, the firm's plan (known as the performance contributions and deferral plan) provided additional deferred compensation for advisers who met performance hurdles. That money would vest based on a set schedule and become payable only if the adviser continued to work at Wells Fargo Advisors or was eligible for retirement. The firm would continue to pay out the unvested portion of their deferred compensation under the condition that they did not work for a competitor firm for at least three years.
The two brokers, who had earned the bonuses by meeting performance goals and who were eligible for retirement under the terms of Wells Fargo's plan, went to work for competitor firms within three years after they left the firm. They argued that the anti-competition provision, which required them to forfeit the remaining balance under their plan, was anti-competitive and a violation of state labor laws.
The settlement will provide a total of $5.56 million to around 135 affected brokers in California and North Dakota.
The attorneys of Eccleston Law Offices represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 50 years in delivering the highest quality legal services.
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