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.