By Ross Kerber and Imani Moise
(Reuters) - A labor-backed group is stepping up pressure on Wells Fargo & Co (WFC.N) to add an employee to a council that has the ear of the bank's board and management, arguing workers deserve a voice as Wells Fargo works to get past a damaging scandal over sales practices.
This raises the sensitive issue of how much of a voice the fourth-largest U.S. bank is prepared to give to its roughly 265,000 workers, some of whom were excessively pressured by managers to sell products to customers, and whose support the bank may need to repair relations with U.S. regulators.
Wells Fargo has not definitively answered the requests from the union-backed Committee for Better Banks for a worker representative to be added to Wells Fargo's recently formed Stakeholder Advisory Council. The committee, which also includes consumer and community advocates, first made the request privately to management last June and repeated it in a May 29 letter seen by Reuters.
The May letter, sent to Wells Fargo Chief Executive Tim Sloan, called for another meeting with management and the committee says it has so far gone unanswered.
At Wells Fargo's annual shareholder meeting in April, Sloan said the idea of adding a worker to the council was "a fair one" but also highlighted other efforts to connect with employees.
The council's current members include consumer and community groups such as the Interfaith Center on Corporate Responsibility, which earlier this year persuaded Wells Fargo to undertake a review of its governance and risk management lapses.
Wells Fargo spokesman Ancel Martinez said the stakeholder council reviews employee feedback and noted other worker-outreach initiatives such as internal message boards. He declined to comment on whether the bank was working on adding an employee to the council.
Cornelius Hurley, a Boston University law professor, said it makes sense for a stakeholder council to have a workers' representative but bank leaders might be shy of union ties at the CBB. The group is backed by community, consumer and labor groups including the Communications Workers of America and has called for changes at other banks including the U.S. operations of Spain's Banco Santander (SAN.MC).
"Bankers go apoplectic when you talk about organized labor," he said.
Erin Mahoney, an organizer for the CBB and the Communications Workers of America labor union, said the lack of a worker on the council stands out considering the other reforms put in place by bank leaders over the past year, under pressure from regulators.
"I'd have to agree that so far it has been a missed opportunity," she said.
The bank named its stakeholder council in late 2017 to advise on a range of topics as it works to improve oversight and governance to show that it has rooted out any customer abuses.
Its scandals erupted in 2016 after employee whistleblowers helped reveal customer abuses involving workers opening potentially millions of unauthorized accounts to hit sales targets. That led to hefty fines and a cap on assets until the bank proves to U.S. regulators its governance has improved.
The stakeholder council meets with Wells Fargo's management and board, which is chaired by Elizabeth Duke, a former Federal Reserve governor who once headed the U.S. central bank's consumer and community affairs committee.
The bank has already taken other steps aimed at rebuilding the trust of employees and, in turn, investors, including eliminating product sales goals for retail workers, granting stock and raising wages.
Sloan said last fall the bank had hired back nearly 2,000 workers who quit or were fired.
At the same time Wells Fargo is under investor pressure to improve expenses per dollar of revenue. One of the CBB's requests is for all Wells Fargo employees to be paid at least $20 an hour, up from a base wage of $15 an hour.
No Wells Fargo employees are labor union members. Just 46,000, or 1.1 percent, of U.S. finance workers were union members, Labor Department statistics for 2017 show, the lowest percentage of any U.S. industry workforce.
Alex Ross, a Wells Fargo bankruptcy specialist in the Minneapolis area and a CBB member, said several dozen colleagues got in touch after he raised the group's issues with Sloan at the April meeting.
"I think for organized labor to survive, it needs to start looking to organize people in un-organized sectors," Ross said. A seat at the council would let workers speak without fear of manager retaliation, he said.
However, bank leaders could be wary of giving workers more influence as a digital banking push changes its workforce needs, said Ben Bystrom, instructor at the Shidler College of Business in Hawaii.
Some members of the stakeholder council said they would be open to the idea of adding a worker.
"Mr. Sloan seemed amenable. I hope it will happen soon," said member Nora Nash, who is also director of Corporate Social Responsibility for the Sisters of St. Francis of Philadelphia.
(Reporting by Imani Moise in New York and Ross Kerber in Boston; Editing by Meredith Mazzilli and Frances Kerry)