Wells Fargo-Investigation

In this May 6, 2012, file photo, a Wells Fargo sign is displayed at a branch in New York.

Wells Fargo & Co. announced Wednesday it is ending, effective immediately, its requirement of arbitration for employees pursuing sexual harassment claims.

The bank released Wednesday a statement following a posting on the issue on its internal and external websites.

Mandatory arbitration, also referred to as forced arbitration, occurs when an employer conditions initial employment, continued employment or important employment benefits on the employee’s agreement to arbitrate any future claims against the employer, according to Workplacefairness.org.

“Wells Fargo has zero tolerance for sexual harassment,” said David Galloreese, head of Human Resources at Wells Fargo. “We believe that this is the appropriate change to make at this time for our employees.

The treatment of sexual harassment claims has become an increasingly prominent issue across industries. We’ve taken many steps to create and maintain a workplace environment that promotes and protects the safety and well-being of our employees.”

Wells Fargo said it made the decision following internal dialogue and feedback from various stakeholders, including the proponents of a shareholder proposal.

The arbitration requirement remains in place for non-harassment disputes.

The Charlotte Observer reported that Clean Yield Asset Management submitted a shareholder proposal in December that focused on mandatory arbitration of workplace sexual harassment claims. Clean Yield has since withdrawn the proposal.

“Our board of directors and CEO Charlie Scharf value and appreciate input from our stakeholders as we consider opportunities to enhance our practices and transparency,” Galloreese said. “We are working hard to improve our company for our stakeholders.”

The company’s mandatory employment arbitration policy generally applies to employees hired since Dec. 11, 2015.

The group cited a survey by the Economic Policy Institute that determined that more than half of nonunion, private-sector employers have mandatory arbitration procedures.

About 56.2% are subject to mandatory employment arbitration procedures, representing more than 60 million private-sector employees.

Lift Our Voices, a group co-founded by former Fox News anchor Gretchen Carlson, has among its goals ending forced arbitration and the use of non-disclosure agreements.

The group said on its Facebook page that the Wells Fargo decision “proves once again that activism works, that together we can end the toxic paradigm that has protected predators at the expense of the women and men who do nothing more than find the courage to stand up for themselves.”

“Wells Fargo’s decision is yet another step in ending the secrecy and silence that survivors of sexual harassment and assault have been forced to endure at the hands of perpetrators and their enablers. One major bank can inspire others in the financial sector to do the right thing.”

rcraver@wsjournal.com

336-727-7376

@rcraverWSJ

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