Most people were shocked to learn that the Office of the Comptroller of the Currency had received over 700 whistleblower complaints about Wells Fargo's sales practices by 2010 yet failed to prevent the activity from continuing. We spoke with Mike Filoromo, a partner with the whistleblower and employment law firm Katz, Marshall & Banks, LLP, in Philadelphia to learn more about the issue. Mike has helped achieve successful outcomes for numerous clients under the Sarbanes-Oxley corporate whistleblower protections, the False Claims Act and the anti-discrimination and retaliation protections of Title VII of the Civil Rights Act and corresponding state laws.
CP: Is it unusual for there to be so many complaints against one company (700 by 2010)
Mike: It is unusual in the sense that there was not any action taken for such a long period of time. On the one hand, Wells Fargo has hundreds of thousands of employees, so even if the complaints were by 700 different employees, you’re talking about a fraction of a percent of the workforce. On the other hand, 700 complaints about essentially the same practice is a big enough number that someone should have taken note.
That is what the Office of the Comptroller of the Currency (OCC) internal investigation concluded – the point person overseeing Wells Fargo did not respond adequately. Evidently this point person went to Wells Fargo, was satisfied with the explanation he received, and took no further action. In the meantime, employees were opening thousands of dummy accounts to boost their performance metrics.
CP: Is there any way to know what happened to whistleblowers who filed the complaints?
Mike: There is not any clear process with the OCC like there is with other whistleblower programs. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have established whistleblower award programs and procedures, and there is some data available based on press releases and reports that the agencies make to Congress on an annual basis. You typically do not know the identity of a whistleblower under these other programs – that is by design – but you do know if there was an enforcement action taken against a company, what the basis for the action was, and whether someone received an award.
In this instance it isn't clear. Some of the people who complained to OCC may have been part of the purge of over 5,000 employees that happened later. But you can’t really tell what happened to these whistleblowers.
CP: The company, Wells Fargo, would not necessarily have known their identity?
Mike: That's right. It is not something public. Having said that, many, if not most, employees with such concerns raise them to supervisors or compliance personnel before reporting to a regulator or law enforcement agency. The overwhelming majority of employees who come to my firm seeking representation to submit a whistleblower tip first raised concerns internally, and often faced retaliation as a result.
As a practical matter, companies can occasionally discern the identity of someone who complained to a regulator like the OCC. Suppose a mid-level manager with insight into Wells Fargo’s sales practices reported concerns to senior management a few times, and then soon after a regulator approached the company asking about those same practices. In that situation, the company could conclude that the individual who complained internally about certain accounting practices also tipped off the authorities.
Otherwise, unless people announced their intention to send a complaint to the OCC, Wells Fargo wouldn't have known their identities.
CP: Suppose someone in a case like this had pushed back internally, maybe filed a complaint with the OCC and later they were let go. Would they have any recourse automatically or would they have to file a complaint under some other provision to address the retaliation?
Mike: There is not an OCC-specific anti-retaliation statute. But with a large, publicly traded financial institution like Wells Fargo, there are a lot of anti-retaliation laws potentially at play, such as the Sarbanes Oxley Act (SOX), the Dodd-Frank Act, and the Consumer Financial Protection Act (CFPA).
SOX and CFPA are administered by the Occupational Safety and Health Administration (OSHA), so the employee would have to file an administrative complaint. The issue for anyone who faced retaliation several years ago is that they are well beyond the 180-day statute of limitations for those two laws. Dodd-Frank goes back three years, but some of these complaints are even older than that.
Likely the only option for someone who faced retaliation more than three years ago would be a state law claim. Most states have recognized a common-law claim for wrongful termination or retaliatory discharge. These are not based on statutes. Instead, courts in those states have cited some exceptions to the rule that most employees are employed at-will and can be fired at any time for any reason. Some of these common-law claims have longer statutes of limitations – Illinois for example has a five-year statute of limitations for retaliatory discharge.
CP: Is there any database or some other way to find out how many complaints have been filed against a company?
Mike: I am not aware of a database like that for the OCC. There are some annual reports made by the Department of Justice that may have some information about number of complaints. Also, from Freedom of Information Act (FOIA) requests you may be able to obtain some information that might not otherwise be public.
CP: Is there any way for a whistleblower or their attorneys to prevent a situation where there are so many complaints but no action is taken? Also do whistleblowers necessarily know what action is taken as a result of their complaints?
Mike: Not necessarily. Sometimes a complaint is made to an agency and it seems to go into a black hole. The agency is not obligated to tell the person who made the complaint what action the agency took, if any.
One way to force the issue from a legal perspective when someone has faced retaliation as a result of raising an issue is to file an anti-retaliation complaint. The complaint will be routed to whatever agency regulates the companies or enforces laws related to the underlying conduct about which the person complained. So, for example, OSHA would send an airline safety whistleblower retaliation complaint to the Federal Aviation Administration, and would send a retaliation complaint relating to food or drug safety to the FDA.
Another way individuals can force the issue – or at least shed light on the conduct about which they are concerned – is through an established whistleblower program. As we discussed, the OCC doesn't have one, but the CFTC and SEC do. You can submit a tip if the conduct in question falls within the jurisdiction of one of those agencies, and you can do so anonymously when you work with an attorney. You may not know how the investigation is progressing, but you know that you got the information in front of people who have enforcement authority.
Also, in the case of both of those programs, there is the potential for financial gain for the whistleblower if the information provided leads to an enforcement action and recovery by the government of over $1 million. The whistleblower award can be up to 30 percent of whatever the government recovers. In one case the reward was thirty million to an individual. So there is the potential to stop the underlying conduct and the potential for significant reward as well.
CP: Given the statute of limitations, if someone had filed a complaint with the OCC and later they lost their job as a result of having pushed back against the company's actions, I guess they would not have any recourse at this point? The act of filing the complaint along with the OCC would not have conferred any protection?
Mike: That's right. There are some ways that statutes of limitations can be extended as a matter of fairness, but they are fairly limited exceptions. Generally once the time period for filing is up, the person doesn't have any recourse under a particular anti-retaliation law.
The SEC whistleblower award program looks back a longer period. It can go back six years and in some cases 10 years. So something that had happened years ago could still be actionable and be eligible for a reward if there was a successful enforcement action. So if someone had information that hadn't been revealed or wasn't publicly known and it would allow the government to take some kind of enforcement action, it would be worth speaking with an attorney to see if it’s worth pursuing.
CP: I think that pretty much covers it. It sounds like one of the lessons is to seek counsel early and learn about your best options for filing a complaint.
Mike: I think that is very important with any potential whistleblower retaliation case. With some of the traditional civil rights statues that protect people from things like racial discrimination you usually have at least 180 days and up to 300 days. Six or ten months may sound like a long time, but when you've lost your job and are trying to make ends meet the thought of going to an attorney may not be the first thing that comes to mind. But it is important to remember that you can have the strongest retaliation case in the world, but if the statute of limitations runs out, you will not have any remedies available.
In most cases you can talk with an attorney for a half hour or so and get an idea of what your options are and what is achievable. Then you can make an informed decision sooner rather than later. These cases can be complicated and trying to figure these things out on your own can be very difficult.