The U.S. Department of Labor (DOL) has ordered Wells Fargo to reinstate and pay approximately $577,500 damages to a former branch manager in Pomona who was terminated for complaining about salespersons creating unauthorized accounts to meet unrealistic sales targets. This is the second Occupational Safety and Health Administration (OSHA) order in 2017 ruling for a Wells Fargo whistleblower. Approximately three months ago, OSHA ordered Wells Fargo to reinstate another whistleblower and pay approximately $5.4M in damages for violating the Sarbanes-Oxley (SOX) whistleblower protection law.
Wells Fargo Whistleblower’s Protected Conduct
OSHA found that Wells Fargo fired the whistleblower in September 2011 because she opposed the bank’s private bankers opening customer accounts and enrolling customers in bank products without their knowledge, consent or appropriate disclosures. These disclosures relate to the unlawful sales practices that resulted in a $185 million fine imposed by the Consumer Financial Protection Bureau (CFPB) and other bank regulators. The CFPB found that Wells Fargo opened approximately 2 million deposit and credit-card accounts without customers’ approval to satisfy sales goals.
OSHA has ordered Wells Fargo to reinstate the whistleblower and pay $577,500, which represents lost wages and benefits (also known as back pay, compensatory damages and attorneys’ fees). In addition, OSHA ordered Wells Fargo to post a notice informing employees of their whistleblower protections under the SOX and Consumer Financial Protection acts. As SOX authorizes uncapped special damages (damages for reputational harm and emotional distress), the whistleblower could potentially recover damages at trial in excess of the amount that OSHA ordered Wells Fargo to pay. Recently SOX whistleblowers have obtained substantial recoveries at trial, including the following three jury verdicts:
- Jury Awards Former Bio-Rad Counsel $11M in Sarbanes-Oxley Whistleblower Case
- Jury Awards Six Million Dollars to Whistleblower in Sarbanes-Oxley Case
- Sarbanes-Oxley Whistleblower Obtains $2.7M in Front Pay
Reasonable Cause Standard in OSHA Whistleblower Investigations
OSHA enforces more than twenty whistleblower protection laws, investigating reprisal complaints and issuing merit findings where there is reasonable cause to believe that retaliation has occurred. A 2015 OSHA memo clarifies that OSHA employs the following “reasonable cause” standard in investigations of whistleblower retaliation claims:
- “The threshold OSHA must meet to find reasonable cause that a complaint has merit requires evidence in support of each element of a violation and consideration of the evidence provided by both sides during the investigation, but does not generally require as much evidence as would be required at trial. Thus, after evaluating all of the evidence provided by the employer and the complainant, OSHA must believe that a reasonable judge could rule in favor of the complainant.”
- “OSHA’s investigation must reach an objective conclusion – after consideration of the relevant law and facts – that a reasonable judge could believe a violation occurred. The evidence does not need to establish conclusively that a violation did occur.”
- “OSHA’s responsibility to determine whether there is reasonable cause to believe a violation occurred is greater than the complainant’s initial burden to demonstrate a prima facie allegation that is enough to trigger the investigation.”
- “Although OSHA will need to make some credibility determinations to evaluate whether a reasonable judge could find in the complainant’s favor, OSHA does not necessarily need to resolve all possible conflicts in the evidence or make conclusive credibility determinations to find reasonable cause to believe that a violation occurred.”
If OSHA orders reinstatement of a SOX whistleblower, the order is effective immediately and is not stayed pending the resolution of any objections or appeal.
OSHA Enforcement of Corporate Whistleblower Protection Laws
There has been some speculation that the Trump Administration might curtail enforcement of whistleblower protection laws. But the recent orders in SOX claims brought by Wells Fargo whistleblowers suggests that DOL leadership is committed to vigorously enforcing whistleblower protections laws. In a press release, Barbara Goto, OSHA regional administrator in San Francisco, stated that “[n]o banking industry employee should fear retaliation for raising concerns about fraud and practices that violate consumer financial protections” and that the DOL “will fully and fairly enforce the whistleblower protection laws under its jurisdiction.” This is welcome news and is consistent with President Trump’s promise to drain the swamp. As Tom Devine, Legal Director of the Government Accountability Project, and I argued in a recent article, Draining the Swamp Requires Robust Whistleblower Protections and Incentives
Sarbanes-Oxley Protects Corporate Whistleblowers
The whistleblower protection provision of the Sarbanes-Oxley Act provides robust protection to corporate whistleblowers, and indeed some SOX whistleblowers have achieved substantial recoveries. On the fifteenth anniversary of SOX, leading whistleblower law firm Zuckerman Law released a free guide to the SOX whistleblower protection law: “Sarbanes-Oxley Whistleblower Protection: Robust Protection for Corporate Whistleblowers.” The guide summarizes SOX whistleblower protections and offers concrete tips for corporate whistleblowers based on lessons learned during years of litigating SOX whistleblower cases.
The goal of the guide is to arm corporate whistleblowers with the knowledge to effectively combat whistleblower retaliation, avoid the pitfalls that can weaken a SOX whistleblower case, and formulate an effective strategy to obtain the maximum recovery.
If you have suffered retaliation for whistleblowing, call us at 202-262-8959 to schedule a free preliminary consultation.
SOX Whistleblower Protection Attorneys
SEC Whistleblower Rewards and Bounties
The experienced whistleblower lawyers at Zuckerman Law represent whistleblowers worldwide before the SEC under the Dodd-Frank SEC Whistleblower Program. The firm has a licensed Certified Public Accountant and Certified Fraud Examiner on staff to enhance its ability to investigate and disclose complex financial fraud to the SEC, and two of the firm’s attorneys served on the Department of Labor’s Whistleblower Protection Advisory Committee and in senior leadership positions at a government agency that protects whistleblowers.
Leading whistleblower law firm Zuckerman Law has substantial experience investigating securities fraud schemes and preparing effective submissions to the SEC concerning a wide range of federal securities violations, including:
- Accounting fraud;
- Investment and securities fraud;
- EB-5 investment fraud;
- Manipulation of a security’s price or volume;
- Fraudulent securities offerings and Ponzi schemes;
- Unregistered securities offerings;
- Investment adviser fraud;
- False or misleading statements about a company or investment;
- Inadequate internal controls; and
- Violations of auditor independence rules.
For more information about the SEC Whistleblower Program, download our free ebook SEC Whistleblower Program: Tips from SEC Whistleblower Attorneys to Maximize an SEC Whistleblower Award