Wells Fargo CEO Timothy Sloan. (Photo: Diego M. Radzinschi/ALM)

Wells Fargo & Co. was negotiating a settlement as recently as last month with a former executive in Colorado who claimed she was unlawfully fired in retaliation for refusing to accept the bank’s widespread practice of opening accounts without customer consent.

Lawyers for the bank notified the U.S. Labor Department in January that settlement talks with Laura Worzella, a former senior vice president in charge of Wells Fargo’s operations in the Denver area, were ongoing. Worzella was fired in June 2017.

Investigators with the Labor Department’s Occupational Safety and Health Administration dismissed Worzella’s whistleblower complaint in November after finding there was sufficient evidence supporting Wells Fargo’s position that it had fired her for reasons unrelated to what she called the “phantom account” scandal. Worzella, represented by the Denver-based attorney Elizabeth “Booka” Smith, appealed the decision, keeping her claims against Wells Fargo alive, according to public records The National Law Journal obtained.

Smith did not respond to requests for comment on Worzella’s case. A lawyer for Wells Fargo, Littler Mendelson shareholder Darren Nadel in Denver, did not immediately return a message seeking comment. Wells Fargo declined to comment on Worzella’s case.

In a January filing at the Labor Department, Worzella and Wells Fargo said they “remain cautiously optimistic that the matter will resolve on or before January 26, 2018.” It was unclear whether the two sides reached a settlement or if negotiations are still continuing. Worzella has until late February to file her objections to the OSHA decision.

Almost two years after reaching a $185 million settlement over allegations that it opened up to 2.1 million potentially unauthorized accounts, Wells Fargo is facing continued scrutiny from financial regulators.

On Friday, citing “widespread consumer abuses,” the Federal Reserve reached a consent order with Wells Fargo barring the bank from growing beyond the the $1.95 trillion in assets it had at the end of 2017 without first getting permission from regulators. The Fed said Wells Fargo would also be replacing four board directors in 2018.

“We take this order seriously and are focused on addressing all of the Federal Reserve’s concerns,” Timothy Sloan, Wells Fargo’s president and chief executive officer, said in a statement.

Wells Fargo’s settlement talks with Worzella come as the bank grapples with a wider whistleblower problem connected to the sales practices scandal. After agreeing to the 2016 settlement with the Consumer Financial Protection Bureau and other regulators, Wells Fargo disclosed it was facing many whistleblower-retaliation claims filed with the Labor Department and in state courts.

In January, Wells Fargo reached a confidential settlement with a fired employee whom the Labor Department had ordered the bank to reinstate and pay $577,500 in back wages, damages and legal fees. Gibson, Dunn & Crutcher and Seyfarth Shaw represented Wells Fargo at various stages of that investigation.

In Worzella’s case, OSHA investigators did not recommend similar relief. According to a copy of the OSHA decision, investigators found there was “no evidence” showing that the firing of Worzella was connected to the sales practices scandal.

Worzella argued she was fired for refusing to condone the opening of “phantom accounts” and later identified herself, during the bank’s internal investigation into the scandal, as an outspoken whistleblower and victim of retaliation. Her attorney, Smith, said in administrative filings last year that Worzella chose to file her complaint with the Labor Department after failing to “resolve this matter directly with Wells Fargo.”

Wells Fargo said the firing stemmed from an investigation into three complaints that had been filed anonymously against Worzella between October and November 2016—the months immediately following the $185 million settlement.

Two of the complaints alleged that, at a women’s leadership conference, Worzella commented that taking four months of maternity leave would be a “complete career derailer.” A third complaint claimed that Worzella had retaliated against an employee for wanting an open position outside Worzella’s team.

Worzella conceded that, during the conference, she said employees who take maternity leave would miss out on promotion opportunities but said her remarks had been taken out of context.

In April 2017, Worzella was interviewed as part of a separate internal investigation into the sales practices scandal. In an interview conducted by an unidentified outside firm, Worzella “disclosed ongoing problems associated with fraud, phantom accounts and her unwillingness to participate in these types of practices,” according to the OSHA order. Worzella also “identified several upper level managers who allegedly encouraged employees to participate in fraudulent banking activities,” the decision states.

Worzella was fired two months later. OSHA found there was “no evidence” that the senior employee relations consultant who decided to fire Worzella “had any knowledge” of the information she provided during the internal investigation into the sales practices scandal.

“The timing between [Worzella’s] protected activity and adverse employment action does suggest temporal proximity; however, there was no evidence of animus,” OSHA Regional Administration Gregory J. Baxter said in an order.

Wells Fargo, according to Baxter, demonstrated the bank “would have taken the same adverse action in the absence of [Worzella’s] protected activity.”