Last month, news broke that Wells Fargo employees had opened two million accounts for customers without their permission. Details from the scandal suggest employees felt pressured to meet impossible sales quotas, and thus opened the fake accounts to avoid being reprimanded. A few employees discovered what was going on and called Wells Fargo’s private ethics hotline to report the fraudulent behavior. The situation suggests Wells Fargo allowed retaliation against whistleblowers.
Instead of being commended for their actions, these employees were fired. Former employees reported being fired for almost any reason Wells Fargo could find, such as being a few minutes late to work. Wells Fargo would allegedly monitor the tipsters to find any reason possible to terminate their positions.
In one case reported by CNN Money, a whistleblower personally emailed CEO John Stumpf to report she felt the sales tactics being used were wrong. She was promptly fired. In another case, a former banker at a Pennsylvania branch described how he refused to open the fake accounts. He called the Wells Fargo ethics hotline and was fired a few days later. His house is now on the verge of being foreclosed upon and he has only been able to find part-time work.
Retaliation Against Whistleblowers is Illegal
It is against the law to retaliate (adverse actions such as firing, demoting or harassing) against employees who are reporting illegal activities. Wells Fargo employees may be protected under the Sarbanes-Oxley Act; a law makes it illegal to retaliate against employees reporting fraud.
The California Whistleblower Protection Act protects employees who report or refuse to participate in activities that are a violation of local, state or federal laws.
Wells Fargo could not only be facing possible securities fraud violations, but lawsuits filed by former employees who were fired for whistleblowing. Two former employees who were fired have filed a class action lawsuit against Wells Fargo seeking $2.6 billion in damages.
The Los Angeles employment law attorneys at the Law Offices of Kesluk, Silverstein & Jacob can help whistleblowers who have been fired by their employers.