Labor Dept. will review Wells Fargo practices

Wells Fargo Bank Co. faces a "top-to-bottom" review of its workplace practices from the U.S. Department of Labor.

The department will conduct a review of all recent complaints, cases and alleged violations, Labor Secretary Tom Perez said in a letter Monday to Sen Elizabeth Warren, D-Mass. The Labor Department has also set up a web site for past and current Wells Fargo employees about labor laws.

"Given the serious nature of the allegations, the recent actions of our federal partners, and recent media reports, I have directed enforcement agencies within the Department to conduct a top-to-bottom review," Perez said in the letter.

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The review comes three weeks after Wells Fargo, one of the nation's largest banks, agreed to a $185 million civil settlement for restitution and fines after admitting that employees had opened more than 2 million accounts that may or may not have been authorized by customers. The company, which gained $2.6 million in fees over the time period (2011 through 2015), says it has fired about 5,300 employees over the fake accounts and has eliminated quotas for bankers, branch managers and district managers starting Jan. 1.

Warren was among Senate Democrats who asked the Labor Department to launch a probe into possible wage, overtime and working-hour violations after a Senate Banking Committee hearing Sept. 20. During that hearing, Wells Fargo CEO John Stumpf was questioned about whether the bank pressured employees to follow the account-opening practices and was grilled about not making senior executives return pay for their roles in the scandal.

Wells Fargo employees were encouraged to achieve a goal of eight Wells Fargo accounts per household, say two former employees who filed suit against the bank last week. In their suit filed in California Superior Court, Alexander Polonsky and Brian Zaghi said they were wrongfully terminated because they "did not meet their impossible quotas" and were made an example of "so that all other employees would learn that they must engage in these fraudulent actions in order to meet the unrealistic sales quotes or else lose their jobs."

In a statement about the labor secretary's action, Warren expressed satisfaction that the department is "initiating a prompt and thorough agency-wide review of all cases, complaints, and violations implicating Wells Fargo over the past several years to determine whether the agency should bring additional claims against the bank.  Every other federal agency with jurisdiction in this matter should follow (the Labor Department's) lead and promptly determine whether Wells Fargo and its senior executives should be prosecuted or otherwise sanctioned.”

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