SAN FRANCISCO (CN) — An attorney representing Wells Fargo again asked a federal judge Tuesday afternoon to dismiss a class action complaint against the company that claims some employees conducted fake job interviews to get around the company’s diversity guidelines.
A Wells Fargo policy required that at least 50% of candidates interviewed for positions that have salaries of more than $100,000 a year were from an underrepresented racial, ethnic, or gender group or were veterans, people with disabilities or members of the LGBTQ community.
According to the complaint brought by investors in the company, Wells Fargo's common stock price plummeted after the New York Times published articles in May and June 2022 detailing the interviews.
The plaintiffs argued in a hearing in August that Wells Fargo execs knew about the practice of fake interviews, thus the company’s statements made in reports and notices filed with the Securities Exchange Commission and press releases, which emphasized the company's commitment to improving workforce diversity, were materially false. However, the complaint was dismissed later that month for failure to plead both falsity and scienter.
In the hearing on Tuesday afternoon, Sharan Nirmul, counsel for the plaintiffs, said that the amended complaint satisfies the deficiencies of the first complaint, and implored U.S. District Judge Trina Thompson to allow the case to proceed to discovery.
Nirmul said that his team's findings were still largely based on the New York Times articles detailing the practice of sham interviews, but he also conducted an independent investigation interviewing nine former Wells Fargo employees, in addition to introducing four new documents that he said show fake interviews were “systemic” at the company.
He said the candidates he interviewed were “geographically diverse” and worked for different departments at the company, and claimed that recruiters told him they were forced to give interviews to minority candidates who had no shot at a job.
“We believe taking those allegations together, they strongly corroborate” the New York Times reporting that this was happening during the class period," Nirmul said.
Brenden Cullen, representing Wells Fargo, said that the amended complaint contains the same deficiencies as the first complaint and should be dismissed for the same reasons.
He said the nine new witnesses don’t adequately show how many sham interviews there were, if any, and that the documents that Nirmul possesses are being mischaracterized, and do not contain probable accusations of widespread sham interviews.
“We still have no idea how many sham interviews there were” during the class period, Cullen said.
Cullen said that Nirmul’s documents and witnesses instead contain claims that Wells Fargo employees sometimes hired “preferred candidates,” a practice he says is normal.
“Just because the hiring manager already has someone in mind, that doesn’t mean the process that follows for other candidates is fake. That’s pretty routine," Cullen argued.
Cullen said a sham interview is an interview that takes place for a job that doesn’t exist; an interview where a longshot candidate interviews and doesn’t get the job cannot be classified as a fake interview.
Cullen said Nirmul needed to show “a way that we can tell the interview was false besides the diverse candidate not getting the job.”
“Is there a possibility that there could be a fake interview when there’s someone in mind? We’re going to hold these interviews but we already know [who we’re going to hire]?” Thompson asked Cullen.
"It’s possible,” Cullen replied. But the diversity guidelines say to interview a pool of diverse candidates, and there’s no proof that Wells Fargo didn’t do just that, Cullen said.
“We don’t think they’ve added enough with these confidential witnesses to move the needle here,” Cullen said, adding there’s no proof that any of the witnesses' claims were communicated to senior leadership at Wells Fargo.
“We’re looking for scienter, we’re looking for evidence,” Cullen said. “There’s no document that shows the number of sham interviews in existence.”
During rebuttal, Nirmul said that having a preferred candidate when looking to fill a position is “not a normal hiring process.”
“For all intents and purposes, they believe they’re getting a fair shot at the job. Not that there’s a favored candidate by the manager,” Nirmul said.
Nirmul said the totality of evidence presented should allow the case to proceed.
Thompson took the matter under submission.
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