Just when it seemed like the ripples of Wells Fargo’s fake account scandal were calming down slightly, the Department of Labor is throwing another pebble into the pond.
The Labor Department announced Friday that it ordered Wells Fargo to pay $577,500 in back pay, damages, and legal fees to a whistleblower who was fired by the bank after she reported that at least three of the “private bankers” working for her were opening accounts in customers’ names without their consent.
Wells Fargo was also ordered to rehire the former branch manager in California and clear her personnel record. The Labor Department did not release the whistleblower’s name as it is the department’s practice to not release such information.
In a statement provided to HousingWire, a spokesperson for Wells Fargo said that the bank disagrees with the Labor Department and plans to seek a “full hearing” into the matter.
“We take seriously the concerns of current and former team members,” the Wells Fargo spokesperson said. “This decision is a preliminary order and to date there has been no hearing on the merits of this case. We disagree with the findings and will be requesting a full hearing of the matter.”
According to the Labor Department, investigators with the department’s Occupational Safety and Health Administration (OSHA) found that Wells Fargo fired the whistleblower in September 2011 after she raised concerns that the bank’s private bankers were opening fake accounts.
That practice eventually led to the bank’s $185 million fine for more than 5,000 of the bank’s former employees opening more than 2 million potentially unauthorized accounts to get sales bonuses.
The fake account scandal also led to the bank revoking the 2016 bonuses for its top executives, clawing back even more money from it top execs, firing four senior managers in February, tossing out another two executives in March, and splitting the role of chairman and CEO after its former CEO resigned.
The company also announced a new pay plan where employee compensation is no longer tied to sales.
Wells Fargo is also nearing a $142 million settlement in a class action lawsuit brought by the customers affected by the fake accounts.
And now, the bank is dealing with its retaliation against a fake account whistleblower.
According to the DOL, the OSHA investigation also found Wells Fargo fired the branch manager for reporting violations of “one or more of the enumerated consumer financial laws implemented and enforced by the Consumer Financial Protection Bureau.”
Additionally, DOL said that the whistleblower’s reports were determined to be protected under the Sarbanes-Oxley Act and the Consumer Financial Protection Act of 2010, and were “determined to be at least a contributing factor in her termination.”
As part of the action, Wells Fargo is required to reinstate the employee, clear her file, and “fully compensate” her for back pay, compensatory damages and attorneys’ fees – a figure that equals $575,500.
Wells Fargo is also required to post a notice informing employees of their whistleblower protections under the Sarbanes-Oxley and Consumer Financial Protection acts.
“No banking industry employee should fear retaliation for raising concerns about fraud and practices that violate consumer financial protections,” Barbara Goto, OSHA regional administrator in San Francisco, said. “The U.S. Department of Labor will fully and fairly enforce the whistleblower protection laws under its jurisdiction.”
[Update 1: This article is updated with a statement from Wells Fargo.]
