Wells Fargo and its shareholders agreed to settle a federal class-action lawsuit alleging the bank misrepresented its diversity, equity, and inclusion hiring initiatives by holding phony job interviews.

Terms of the settlement are being negotiated and expected to be submitted for court approval by Oct. 13, according to a Sept. 15 filing in U.S. District Northern District of California

From February 2021 to June 2022, the plaintiffs claimed in the suit that diverse candidate interviews were shams and held despite the fact that another candidate was already selected for the job.

“We believe the claims were without merit,” Wells Fargo said in a statement Wednesday to The Charlotte Observer. “Wells Fargo does not tolerate discrimination in any part of our business.”

The bank also noted the U.S. Department of Justice and the Securities and Exchange Commission closed investigations into the allegations without taking action.

A court hearing has been requested for mid-November over the settlement “in principle.”

The San Francisco-based bank has its largest employment hub in Charlotte, with about 27,000 employees.

What happened in the Wells Fargo DEI case?

SEB Investment Management AB filed the complaint on behalf of plaintiffs in September 2022, claiming the Wells Fargo misled investors about efforts to increase DEI efforts for higher- paying jobs. The bank denied those claims.

For all U.S. job openings paying at least $100,000 a year or more, Wells Fargo mandated that at least half of the candidates come from a diverse background, The Charlotte Observer previously reported. This included under-represented racial or ethnic groups, women, veterans, LGBTQ individuals and people with disabilities.

In 2022, the Securities and Exchange Commission scrutinized the bank’s hiring practices, The Charlotte Observer reported.

And last year, a California federal court judge rejected Wells Fargo’s efforts to toss out the case. Wells Fargo said then that it was dedicated to DEI, and does not tolerate discrimination in any part of its business.

DEI rollback at Wells Fargo

In Wells Fargo’s 2024 diversity, equity and inclusion report to the SEC, the bank said that 46% of its 238,000-person workforce was racially and ethnically diverse, the Observer reported. Wells Fargo said then it was “committed to advancing diversity” even in the current political climate.

But in the wake of President Donald Trump’s anti-DEI executive order signed Jan. 21 and a broader backlash building against such programs, Wells Fargo changed its references to diversity and equity in SEC reports this year.

Seven out of nine of the largest publicly traded companies in the Charlotte area, including Wells Fargo, dropped references to diversity and equity, a Charlotte Observer report found.

For instance, Wells Fargo cut its “Pay Equity Review” section that included “Promoting Diversity, Equity and Inclusion” listed in last year’s 10-K filing.

But Wells Fargo’s website includes an “Inclusion and Accessibility” page that says it’s committed to building an inclusive workplace.

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