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Settlement reached in Wells Fargo whistleblower retaliation case

by | Jan 26, 2018 | Whistleblower Protection

The Harvey Weinstein revelations opened the floodgates on sexual harassment. Countless women and men who had been scared or threatened broke their silence, telling their stories and supporting each other under the #MeToo umbrella.

Might we see a similar movement for whistleblowers? The massive fraud scandal at Wells Fargo unleashed a huge social media backlash against the banking giant. Other employees came forward to expose shady practices. Now Wells Fargo has settled with the employee who first raised red flags in 2011. Will it give courage and voice to a new wave of whistleblowers?

She Was Fired After Calling The Whistleblower Hotline

There’s a reason more employees don’t do the right thing. Claudia Ponce de Leon was a retail bank manager for Wells Fargo. After 10 years of service with multiple promotions, she was abruptly fired in 2013, just three weeks after calling an internal ethics hotline. Ponce de Leon had called foul on deceptive practices at local bank branches, but apparently someone up the chain did not want those practices exposed.

In 2016, Wells Fargo admitted to opening millions of fake accounts in customers’ names without their knowledge. The company paid $185 million in fines and the CEO stepped down as a result of the scandal. The Department of Labor also ordered Ponce de Leon (and other fired whistleblower) reinstated with back pay. After promising to appeal, Wells Fargo reversed course and reached a confidential settlement with Ponce de Leon on Jan. 12.

Whistleblower Retaliation Is (Usually) Against The Law

The Whistleblower Protection Enhancement Act provides strong protections for federal employees who report fraud or illegal behavior within their agency or with federal contracts. The WPEA provides legal remedies to whistleblowers who have suffered termination, demotion, transfer, harassment or other reprisal after reporting wrongdoing.

However, not all whistleblowing statements are covered by the WPEA. In the private sector, the protections are even weaker and more spotty. Every case is unique, and it is critical to seek legal advice from an employment law attorney to understand your rights, your options and any limitations before coming forward as a whistleblower.

Social media has been a game-changer for shedding a light on the initial wrongdoing and the retaliation. Hopefully, a positive result in this high-profile whistleblower case will encourage others to take that bold step.