One Wells Fargo branch has voted to unionize. Here's what's next.

Angus Mordant/Bloomberg

Wells Fargo employees at a New Mexico branch voted 5-3 to form a union, a victory that labor organizers hope to replicate elsewhere as they seek to unionize one of the country's biggest banks.

The union at an Albuquerque branch represents a tiny part of Wells Fargo's vast branch footprint. Unionization efforts at the bank also took a small step back as a planned vote in its Bethel, Alaska branch on Thursday was scrapped when workers withdrew their petition.

Still, the Albuquerque branch vote marks a significant victory in efforts to unionize banking, an industry where organized labor has been nearly nonexistent. Organizers said it's the first union victory at a megabank in decades.

"Today marks a historic moment for Wells Fargo workers, bankers and the labor movement as a whole," Alexander Rihani, associate personal banker at the New Mexico branch, said in a news release. "All of us in Albuquerque are incredibly proud to be helping lead this unprecedented change in the financial services industry."

The union's victory "is the first of many to come," Sabrina Perez, a senior premier banker at the branch, said in the release.

In a statement, Wells Fargo said: "We respect our employees' rights to vote for union representation. At the same time, we continue to believe our employees are best served by working directly with the Company and its leadership."

The vote follows a couple of years of high-profile labor fights in the United States, with unionization efforts being undertaken at Starbucks, Amazon and several other major companies. Unions in Hollywood and at Detroit automakers have gotten large contract concessions after striking, and graduate students have seen major gains in their unionization push. Employees at United Parcel Service have also gotten pay raises without striking.

While the share of unionized workers in the United States hasn't moved much, the victories have helped workers see what unions can offer, said Susan Schurman, a labor studies professor at Rutgers University. She is also the president of the International Federation of Workers Education Associations.

"Workers in sectors that have not had union presence in the past have been following the press," Schurman said. "They see what unions can do."

A few credit unions and small banks have unionized, but those companies are far from the size of Wells Fargo. The $1.9 trillion-asset bank remains mired in regulatory troubles, stemming from a consumer abuse scandal in 2016 that was partly due to aggressive sales targets for customer-facing employees.

For years, the union-backed Committee for Better Banks has been helping Wells Fargo employees band together to discuss working conditions, whether in branches or at call centers.

Those efforts have coalesced into a union called Wells Fargo Workers United, which is part of the Communications Workers of America. In addition to the victory in New Mexico, employees at a Wells branch in Daytona Beach, Florida, have filed for elections with the National Labor Relations Board.

Meanwhile, the scrapped unionization vote at the Bethel, Alaska, branch was a win for Wells Fargo's management. A company spokesperson said the San Francisco-based bank was "pleased with this development" and looks forward to "continuing to engage with our employees directly."

Walker Sexton, a personal banker for Wells Fargo in Bethel, said in a statement that Wednesday was "the first day of a brighter future at the bank." 

"Although those of us at the Bethel branch have decided to withdraw our petition and hold on moving forward with a union election at this time, our values have not changed," Sexton said. "We believe Wells Fargo workers need a voice on the job. We believe in being advocates for ourselves and our customers. We believe change at Wells Fargo is past due."

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At a congressional hearing earlier this month, Sen. Sherrod Brown, the Ohio Democrat who chairs the Senate Banking Committee, pressed Wells Fargo CEO Charlie Scharf about the unionization drive, highlighting reports of anti-union activity at the bank.

Asked whether he'd remain neutral on the issue, Scharf said it's "best that we have a direct relationship" with employees and that the bank plans "to exercise our right to speak with them to make sure that they make an informed decision."

Brown said he regretted that Scharf, who joined the bank in late 2019, didn't take up the chance to show that it's "truly a new day at Wells Fargo."

Schurman, the Rutgers professor, said that forming a union is just the first step, and that a major challenge for the workers will be getting enough leverage to negotiate a contract. 

"As long as all you've got is a toehold, a minority of stores, there is no real incentive for the employer to bargain," Schurman said, adding that U.S. labor laws offer "all kinds of ways" for employers to avoid reaching their first contract with a union.