Wells Fargo Ordered to Pay Whistleblower $5.4 Million
A federal regulator has ordered Wells Fargo to pay a whistleblower $5.4 million and restore the former employee’s job. The award is the largest to a single individual in the agency’s history.
OSHA (Occupational Safety and Health Administration), part of the Department of Labor, said Wells Fargo must compensate and rehire the former employee. The whistleblower, who worked in Los Angeles, was fired in 2010. The agency says Wells Fargo terminated the employee in retaliation for reporting incidents of suspected wire, bank and mail fraud by two employees under his supervision.
The bank has been ordered to pay attorney’s fees, compensatory damages and back pay totaling $5.4 million. The former employee, who worked in the wealth management unit, says he has been unable to find work in the industry since being terminated.
It is unknown whether the suspected fraud reported by the manager was part of the major scandal that has plagued Wells Fargo since September. Bank employees were found to be setting up unauthorized credit card and bank accounts in customers’ names.
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After investigating the former employee’s complaint, OSHA concluded that the fraud reports were a contributing factor in his termination. Wells Fargo plans to fight the ruling.
“We disagree with the findings and will be requesting a full hearing of the matter,” said a spokesman for the bank. “This decision is a preliminary order, and to date there has been no hearing on the merits of this case.”
Wells Fargo has been under fire since it came to light that employees opened two million fraudulent accounts in order to meet aggressive sales goals. At least 5,300 employees have been fired since news broke of the scandal. Wells Fargo has paid $185 million in settlements.
The bank was also heavily criticized for not heeding internal warnings about the issue.
John G. Stumpf, former CEO of the company, retired under pressure in October. Timothy J. Sloan, the newly-appointed CEO, says the company may have retaliated against some former employees.
The bank has hired independent investigators to look into the retaliation claims. A few cases that have already been examined “raised questions,” according to Sloan.
OSHA has also been heavily criticized for not moving quickly on investigations into the dozens of complaints filed by former and current Wells Fargo employees.
The complaint that led to OSHA’s order this week was filed in 2011. The agency said the investigation dragged on for six years due to its complexity and the heavy caseloads OSHA investigators carry. The investigator in charge of this case was juggling 30 others, OSHA says.
“Unemployed whistleblowers can’t financially afford to wait six years for justice,” said Tom Devine, legal director at the nonprofit group Government Accountability Project. “With those kinds of delays, it’s like getting a heart transplant after the patient has died.”
OSHA has also ordered Wells Fargo to post a notice informing its current employees of whistleblower protections under the Sarbanes-Oxley Act of 2002. The bank must also clear the employee’s personnel file.
OSHA says this award tops the $1.3 million awarded in 2013 to the former CFO of Clean Diesel Technologies.
Author: Jacob Maslow
