Wells Fargo Scandal Could Lead to Major Whistleblower Liability for Businesses

Americans have been shocked by news reports about false accounts at Wells Fargo Bank, which led to $185 million in fines and the firing of 5,300 employees. With such widespread misconduct, it is natural to ask whether workers attempted to report the illegal behavior to supervisors. Many former employees have come forward to declare that they tried to stop the misconduct but experienced unlawful retaliation for their whistleblowing. These allegations could lead to a new wave of legal problems for Wells Fargo.

Whether your business is large or small, managers and other company authorities must remain vigilant and take special care to avert whistleblower problems.  Several circumstances can trigger an increased risk of liability, including:

• Institutionalized misconduct — When certain types of misbehavior become standard practice, it can be easy to overlook potential whistleblower liability. Rather than identifying employees as a retaliation risk, supervisors might convince themselves that employees who speak up about misconduct don’t “fit in” with the company’s culture. Each action taken against an employee should be evaluated on its own merits.
• Pretenses for firing or other retaliation — Listing a different justification for disciplining or terminating an employee is not a safeguard against a retaliation claim. Without proper documentation, these purported grounds might not withstand scrutiny, especially in a high-profile matter. The Wells Fargo whistleblower who was fired for “tardiness” shortly after identifying corporate malfeasance might have a compelling claim in light of recent revelations.
• Misplaced reliance on whistleblower protection policies — Executives and managers cannot assume that decisions made by subordinates automatically adhere to company whistleblower protection policies. Strong internal policies are a good first step, but verification is necessary to avert potential liability.

The number of Wells Fargo employees who might have a whistleblower claim means that the eventual resolution could be very costly. For many companies, even one retaliation lawsuit can result in significant damages.

If your company is the target of a retaliation complaint or if you are interested in ways to guard against potential whistleblower liability, a knowledgeable Dallas attorney with Whistleblower Law for Managers can evaluate your situation.