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Feds order Wells Fargo to rehire whistle-blower and pay him $5.4 million

Wells Fargo & Co. has been ordered to rehire a former Los Angeles-area bank manager who federal officials say was fired because he reported potential fraud to his superiors and to a bank ethics hotline — a claim the bank denies even as it has acknowledged problems with its hotline.

The Occupational Safety and Health Administration said Monday that the San Francisco bank must not only rehire the whistle-blower, who was fired in 2010, but pay him $5.4 million in back pay, damages and legal fees.

The employee has been unable to find a banking job since, and his award includes earnings lost during his time out of the industry, the agency said in its statement.

An OSHA investigation found that the worker told his superiors and the bank’s ethics hotline that he believed two employees under his supervision were involved in fraud. Soon afterward, despite a record of good performance reviews, the worker was fired, OSHA said. The agency does not release the names of workers involved in whistle-blower cases.

“He verbally told his managers, and he also called the hotline,” said Barbara Goto, regional administrator for OSHA. “Because of that, he was retaliated against by Wells Fargo.”

Federal whistle-blower laws prohibit companies from retaliating against workers for reporting legal violations, either internally or to government officials.

Vince Scanlon, a Wells Fargo spokesman, said the bank will appeal the finding.

“We disagree with the findings and will be requesting a full hearing of the matter,” he said in an email.

Scanlon noted that the worker in this case worked in the bank’s wealth management practice, not in the retail banking division that’s been at the heart of the bank’s accounts scandal.

Still, OSHA’s finding that the worker was retaliated against — at least in part for reporting violations to the company’s ethics hotline — mirrors claims made by numerous bank employees. They say they were fired or disciplined after calling the hotline to report that other workers were creating accounts for customers without authorization.

The bank last year acknowledged that from 2011 to 2015, workers created as many as 2.1 million accounts without authorization and the bank fired 5,300 workers over the practice.

In a speech to Wells Fargo employees in January, Chief Executive Timothy Sloan said the bank hired an outside firm to review cases of employees who were fired within a year of calling the ethics hotline.

“A few cases of the hundreds reviewed raised questions, and we are following up on them,” he said.

He said the bank would also expand that review to include cases in which workers were disciplined within a year of calling.

In September, soon after Wells Fargo reached a $185-million settlement with regulators, then-Labor Secretary Thomas Perez promised a “top-to-bottom” review of labor complaints against Wells Fargo.

That could include claims of whistle-blower retaliation as well as unpaid wages. Some Wells Fargo employees have complained that they were forced to work without pay to try to meet onerous sales goals, which regulators say contributed to workers opening unauthorized accounts.

A Labor Department spokesman said Monday that the review of the bank’s practices is ongoing, though a department website set up to provide information to, and collect complaints from, Wells Fargo workers was taken down in January.

james.koren@latimes.com

Follow me: @jrkoren

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