Ibarra v. Wells Fargo Bank N.A. et al.

Central District

U.S. District Judge Percy Anderson

$97.28 million

Plaintiffs' Lawyers: Joshua H. Haffner, Graham G. Lambert, Haffner Law PC; Paul D. Stevens, Stevens LC

Defense Lawyers: Thomas R. Kaufman, Paul Berkowitz, Jason P. Brown, Sheppard, Mullin, Richter & Hampton LLP

Wells Fargo Bank N.A. thought it should pay $24.5 million to a class of employees suing over wage and hour violations. U.S. District Judge Percy Anderson ordered them to pay nearly four times that.

Plaintiff Jacqueline Ibarra, a former home mortgage consultant, filed a lawsuit against her former employer in 2017. Consultants such as Ibarra were paid on commission, but she claimed Wells Fargo reduced consultants' salaries to adjust for rest breaks as if they were considered hourly workers.

Ibarra, the lead plaintiff for a class of similarly situated employees, also claimed Wells Fargo failed to properly compensate workers for mandatory meetings, training, networking events or other job requirements not considered part of the regular course of their work.

Anderson granted Ibarra's summary judgment motion in January 2018, finding the bank liable for labor code violations. That meant the only thing left to decide was how much Wells Fargo should have to pay.

Joshua H. Haffner, a Los Angeles attorney with Haffner Law PC representing the plaintiff class, asked the judge to compensate plaintiffs based on their salaries, including commissions, which they calculated to be almost $97.3 million.

Defense counsel Paul Berkowitz of Sheppard, Mullin, Richter and Hampton LLP argued Wells Fargo should only pay $24.5 million based on state labor codes.

Anderson sided with the plaintiff in May, finding the wording of the labor codes Wells Fargo was citing didn't support their interpretation of how an award should be calculated. Ibarra v. Wells Fargo N.A. et al., 17-CV4344 (C.D. Cal., filed May 8, 2017).

Haffner said the ruling broke new ground in the banking industry, "essentially making a new law requiring that these mortgage brokers be separately compensated for rest breaks. Employment attorneys at the time observed that the ruling finally provided guidance to a hotly contested point of contention in labor law.

"No court had actually decided on these issues," Haffner said. "It was a tremendous result for the class."

Paul D. Stevens, a Los Angeles attorney and counsel for the plaintiff class, said he felt the award was particularly remarkable given the breakneck pace of the case. With Ibarra's case filed in May 2017 and resolved in May 2018, the entire class action took just a year.

"We decided early on we wanted to move fast," Stevens said.

Wells Fargo has appealed the decision to the 9th Circuit Court of Appeals. Haffner said a hearing on the appeal hasn't been scheduled yet. Berkowitz declined to comment.

-- Steven Crighton