Retaliation in the Workplace: Employment Law

It is not uncommon for employers to retaliate against their employees for reporting illegal/unethical practices taking place within their own company. Retaliation under these circumstances usually involves termination, however it can also consist of harassment, demotion, cut in salary, or any other adverse employment action. One such example of employee retaliation has just surfaced out of a national scandal.

In recent news, Wells Fargo has fired 5300 employees for opening approximately 1.5 million bank accounts and 565433 credit card accounts without the authorization or knowledge of its customers. These unethical and illegal activities began in 2011 and did not come to the attention of many customers till years later. The purpose of opening additional bank accounts and credit card accounts for customers without their knowledge was to obtain additional fees – i.e., insufficient fund fees, overdraft fees, annual fees, and interest charges.

However, it was not until this scandal was reported that another scandal surfaced. It has now come to the public’s attention that numerous former employees tried to prevent these illegal and unethical practices from continuing but were fired soon after doing so. One such former Wells Fargo employee refused orders to open unauthorized client bank and credit card accounts. In addition, he reported the illegal and unethical tactics to Wells Fargo’s ethics hotline and even sent HR an email regarding it. This former Wells Fargo employee was terminated 8 days after sending the email to HR. Another former Wells Fargo employee reported these sale tactics to Wells Fargo CEO John Stumpf directly and was fired shortly after doing so.

These newly surfaced facts not only mean that Wells Fargo was aware of the unethical practices taking place against their clients, but they also mean that Wells Fargo violated the law when it fired its employees for internally reporting the unethical and illegal behavior.

As a consequence of Wells Fargo’s illegal and unethical sale tactics, the California state treasurer, John Chiang, has suspended “many of its ties” with the bank for at least a year. Mr. Chiang stated the following in a letter written to Wells Fargo CEO John Stumpf and other board members: “How can I continue to entrust the public’s money to an organization which has shown such little regard for the legions of Californians who placed their financial well-being in its care?”. Wells Fargo’s suspension will last a year, but could possibly continue for a longer period of time if the bank resumes its illegal and unethical sale tactics or violates the terms of a consent order it signed.

Why is it Against the Law?

It is against the law for employers to retaliate against employees for reporting illegal/unethical practices taking place (CA Labor Code § 1102.5). In fact, an employer CANNOT “retaliate against an employee for disclosing information…to a person with authority over the employee or another employee who has the authority to investigate, discover, or correct the violation…” (CA Labor Code § 1102.5(b)). Also, an employer CANNOT “retaliate against an employee for refusing to participate in an activity that would result in a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation” (CA Labor Code § 1102.5(c)).

On September 26, 2016 six former Wells Fargo employees filed a class action lawsuit in federal court against Wells Fargo. They are seeking approximately $7.2 billion for all Wells Fargo employees who were fired or demoted after refusing to take part in the illegal and unethical behavior of opening accounts without client permission. This class action lawsuit comes after only just a week prior when a class action lawsuit was filed in California Superior Court by another 2 former Wells Fargo employees.

If former Wells Fargo employees can prove that they were fired for either refusing to open accounts without client permission or for internally reporting the unethical and illegal tactics, then Wells Fargo will likely be subject to liability for retaliation.

What Are Your Legal Options?

If you feel that your employer has retaliated against you for reporting illegal activity or for refusing to conduct illegal activity, you may have legal options. The law office of Gwilliam Ivary Chiosso Cavalli & Brewer has an experienced team of employment lawyers ready to help. Please contact us today for a free consultation at (510) 832-5411.

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