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Illustration: Aïda Amer/Axios

The banking world was rocked this week with two major headlines: One, that Wells Fargo is dropping its mandatory arbitration clause for employee sexual harassment complaints; and two, that a former employee of PNC won a $2.4 million jury award in her harassment case against the bank.

Why it matters: Originally, the #MeToo movement was largely focused on the media and entertainment worlds, before migrating to technology companies. Now it looks like commercial banks are in the crosshairs, too.

Driving the news: Wells Fargo on Wednesday became the first of the big banks to say it would no longer require arbitration when employees file sexual harassment claims — a process that typically ends with the employee signing a non-disclosure agreement, meaning word of the dispute never gets out.

  • Wells, still recovering from its fake accounts scandal, said it "made the decision following internal dialogue and feedback from various stakeholders."
  • One stakeholder was Clean Yield Asset Management, which pressured the bank by putting forth a shareholder proposal to abolish the mandatory arbitration clause (now withdrawn).
  • The move may reflect that Wells' new CEO, Charlie Scharf, wants to shake things up and build a fresh corporate culture.

A New Jersey jury on Monday also determined that Pittsburgh-based PNC should pay $2.4 million to former employee Damara Scott, a wealth management professional who was sexually assaulted by a male customer. Her suit alleges that he was well-known to the bank for such behavior and that PNC refused to take action after the incident.

The bank plans to appeal the verdict. A spokesman told Axios that "PNC does not condone harassment of any kind," adding: "Current and former branch employees testified that they received sexual harassment training annually and that they did not view this customer as a threat."

  • Scott's lawyer, Nancy Erika Smith of the law firm Smith Mullin, tells Axios that the #MeToo movement has emboldened women to step forward, and that the trend is just now hitting the banking industry.
  • Since the verdict on Monday, Smith said: "I've heard from four female bankers who say they were harassed by wealth customers."
  • Scott, who joined PNC as a teller in 1998, had not been asked to sign a mandatory arbitration clause, Smith said.

Smith previously represented former Fox News anchor Gretchen Carlson in her successful suit against Roger Ailes, as well as former Fox contributor Julie Roginsky, who reached an undisclosed settlement with Fox in her suit against Ailes.

  • "I haven't seen a big dent in stopping sexual harassment in 40 years," Smith tells Axios. "When my clients complain, they are forced into arbitration."
  • Banking, she said, has been "on the fringes" of the battle against sexual harassment.

What they're saying: One lawyer who represents harassment victims, Lisa Banks of the firm Katz, Marshall & Banks, noted to Axios that ending forced arbitration for sexual harassment — which Microsoft, Google and Facebook have also done — doesn't protect victims of race, age or other discrimination.

  • "I'd like to see mandatory arbitration eliminated" for both employees and customers, Banks said.
  • Lift Our Voices — an anti-NDA group founded by Carlson, Roginsky and former Fox News reporter Diana Falzone — said of Well's move: "One major bank can inspire others in the financial sector to do the right thing."

The bottom line: Commercial banks may have avoided the #MeToo limelight so far in part because they are so highly regulated, and thus have more aggressive zero-tolerance policies.

  • "It's not enlightenment, it's compliance," Charles Wendel of Financial Institutions Consulting, which serves the banking industry, tells Axios. "They don't want to be in trouble with the regulators."

Go deeper

12 hours ago - Health

FDA advisory panel recommends Pfizer boosters for those 65 and older

A healthcare worker prepares a dose of the Pfizer-BioNTech Covid-19 vaccine at the Key Biscayne Community Center on Aug. 24, 2021. Photo: Eva Marie Uzcategui/Bloomberg via Getty Images

A key Food and Drug Administration advisory panel on Friday overwhelmingly voted against recommending Pfizer vaccine booster shots for younger Americans, but unanimously recommended approving the third shots for individuals 65 and older, as well as those at high-risk of severe COVID-19.

Why it matters: While the votes are non-binding, and the FDA must still make a final decision, Friday's move pours cold water on the Biden administration's plan to begin administering boosters to most individuals who received the Pfizer vaccine later this month.

12 hours ago - World

France recalls ambassadors from U.S. and Australia over submarine deal

Secretary of State Antony Blinken (L), French Foreign Minister Jean-Yves Le Drian (C), and French ambassador to the U.S. Philippe Etienne. Photo: Nicholas Kamm/AFP via Getty Images

France has taken the extraordinary step of recalling its ambassadors to the U.S. and Australia after both countries blindsided their French allies with a new military pact and submarine contract, the French Foreign Ministry announced on Friday.

The backstory: While sealing an agreement with the U.S. and U.K. to acquire nuclear submarines, Australia ripped up an existing $90 billion submarine deal with France. That led senior French officials to accuse the U.S. of a "stab in the back."

Updated 12 hours ago - World

In reversal, Pentagon now says drone strike killed 10 Afghan civilians

Caskets for the dead are carried towards the gravesite as relatives and friends attend a mass funeral for members of a family that is said to have been killed in a U.S. drone airstrike, in Kabul on Aug. 30. Photo: Marcus Yam/Los Angeles Times via Getty Images

A U.S. drone strike launched on Aug. 29 killed 10 civilians in Afghanistan, including seven children, rather than the Islamic State extremists the Biden administration claimed it targeted, the Pentagon said Friday.

Why it matters: U.S. Central Command said at the time that officials "know" the drone strike "disrupted an imminent ISIS-K threat" to Kabul's airport, and that they were "confident we successfully hit the target."

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