Wells Fargo has confirmed that it’s under investigation and facing a lawsuit over a “diverse slate” hiring approach that has recently put the company in the spotlight, according to news reports.

The company disclosed in a regulatory filing on Monday that government agencies, including the Department of Justice, are conducting “formal or informal inquiries or investigations” into its hiring practices, Compliance Week writes.

Moreover, Wells Fargo also disclosed that it’s facing a class-action lawsuit that accuses the firm and some of its executives of making “false or misleading statements” about the diverse hiring methods, according to the publication, which cites the complaint filed in June in U.S. District Court for the Northern District of California.

The complaint alleges that Wells Fargo and the executives “[m]isrepresented their commitment to diversity in the workplace,” conducted sham interviews to meet diversity hiring goals, harmed the bank’s reputation and put it under increased risk of regulatory scrutiny, according to Compliance Week.

The investigation and the complaint centers on a “diverse slate” hiring policy, implemented in 2020, requiring that 50% or more of the candidates being interviewed for open positions with a salary of $100,000 or more to be “diverse,” meaning non-white or female.

The policy made headlines in June, when The New York Times cited several current and former Wells Fargo staff claiming that the firm instructed staff to interview Black and female candidates for jobs in the wealth management unit that had already been filled.

The Times also reported that month that Wells was facing a criminal investigation by a newly created civil rights unit inside the criminal division of the Manhattan U.S. attorney’s office.

Following those reports, Wells Fargo suspended the policy.

Wells Fargo chief executive officer Charles Scharf wrote in a memo to staff in June that Wells Fargo would temporarily suspend the policy so that executives have time to analyze and make changes, ensuring that “hiring managers, senior leaders and recruiters fully understand how the guidelines should work.”

On Monday, Wells Fargo said that it reinstated the policy after a six-week review of its hiring practices and interviews with the firm’s recruiters and hiring managers.

“We are recommitting to our diverse candidate slate guidelines with changes that will help clarify and simplify the process and lead to a better experience for all candidates, internal and external. We began this exercise knowing that diverse candidate slates work, and that they are a common, good practice across multiple industries,” Bei Ling, Wells Fargo chief human resources officer, said in the statement.

The firm added that it would implement several changes, however, including redefining which positions fall under the policy based on job level rather than compensation.

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