U.S. orders Wells Fargo to reinstate whistle-blower and pay $577,500 in compensation
The U.S. Labor Department has ordered Wells Fargo & Co. to reinstate another former employee who alleged she was fired after reporting part of the widespread fraud that engulfed the bank in a major scandal.
The whistle-blower, a former branch manager in Pomona, will be reinstated and paid $577,500 in back wages, damages and other compensation, , the agency said, based on an investigation by the department’s Occupational Safety and Health Administration.
The Labor Department does not release the names of whistle-blowers.
San Francisco-based Wells Fargo issued a statement saying that, while “we take seriously the concerns of current and former team members,” the ruling announced Friday “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.”
The government’s ruling came three months after OSHA ordered Wells Fargo to reinstate another former manager, this one in Los Angeles, and pay him $5.4 million in back earnings, damages and attorneys’ fees.
“No banking industry employee should fear retaliation for raising concerns about fraud and practices that violate consumer financial protections,” Barbara Goto, OSHA’s regional administrator in San Francisco, said in a statement Friday.
“The U.S. Department of Labor will fully and fairly enforce the whistle-blower protection laws under its jurisdiction,” she said.
The scandal erupted after a Los Angeles Times investigation found that bank employees, driven by onerous sales goals, opened millions of unauthorized checking, savings and other accounts in customers’ names, often without their knowledge. Regulators following up on The Times’ reporting levied a $185-million fine against Wells Fargo last year.
The Pomona manager was fired in September 2011 because she reported that at least three bankers working under her supervision “were opening customer accounts and enrolling customers in bank products without their knowledge, consent or appropriate disclosures,” the Labor Department said.
Earlier this month, a federal judge granted preliminary approval for Wells Fargo’s proposed $142-million class-action settlement to compensate possibly millions of customers who had unauthorized accounts opened in their names.
The decision meant the plaintiffs in class-action suits would soon receive information about how to submit claims for benefits. A hearing to decide final approval of the deal is scheduled Jan. 4, 2018.
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