Wells Fargo Whistleblower on Sham Interviews Wins Right to Sue

(Bloomberg) — The whistleblower who accused Wells Fargo & Co. of conducting fake interviews with minority candidates can now sue the bank over his firing.

Wells Fargo lost its bid to take the former employee’s wrongful termination complaint to confidential arbitration. This means Joe Bruno will have the chance to take his claims that his firing was retaliation to court and potentially offer new details about the interviews.

Bruno was the first to publicly announce in 2022 that Wells Fargo was interviewing minority candidates for already filled positions so executives could say they were making concrete efforts to diversify the bank’s workforce. His revelations led the U.S. Department of Justice to launch a criminal investigation into whether the bank violated civil rights laws. Wells Fargo shareholders sued over the collapse in the bank’s stock price, gaining class-action status before reaching an $85 million settlement last month.

Wells Fargo said fake interviews, if they occurred at all, were not common. In a filing submitted to regulators in February 2024, it was stated that the Department of Justice had closed its investigation. The bank claimed in a statement, which was also visible to other banks considering hiring him, that Bruno was fired for “workplace conduct that was not in line with company standards.” Bank officials claimed he misbehaved with another employee.

“Mr. Bruno’s allegations are baseless,” Wells Fargo spokeswoman Dana Ripley said in an emailed statement. “Any allegations he made must be viewed in the context that he was fired following an investigation that confirmed he retaliated against another employee who made an internal complaint about him, and then launched a campaign by sending highly offensive and threatening messages to other employees.”

Ripley said Wells Fargo will “vigorously defend ourselves against the allegations of this lawsuit.”

The dispute with Bruno is one of the latest issues to come to the fore in connection with the allegedly fake interviews. Wells Fargo lawyers argue Bruno has no right to sue, saying he signed an agreement in 2016 to collect his bonus payment more quickly stating that any disputes he has with the bank must be resolved through closed-door arbitration with the Financial Industry Regulatory Authority, the industry group that oversees financial advisors.

Bruno and his lawyer, Linda Friedman, argued that the agreement applies only to disputes over bonus pay and expires in 2019.

“Under the Federal Arbitration Act, the dispute must arise out of the underlying contract,” Friedman said. “It’s like you went and bought a television set, it had an arbitration agreement on it, and then you worked for a company, that’s irrelevant.”

On Thursday, Finra’s arbitration panel issued a decision in Bruno’s favor, saying “there is no valid and enforceable agreement to arbitrate.”

“While we disagree with the Finra decision and view it as inconsistent with Finra practice, it is important to note that the Finra arbitration panel did not make any decision on the merits of Mr. Bruno’s termination claims,” ​​Wells Fargo’s Ripley said.

Bruno said in an interview on Thursday that “the dismissal allegations are 100% false and I have defended this from the beginning.” He added that the lawsuit also offers a chance to hold the bank accountable for its “performative” diversity, equity and inclusion efforts.

The interview practices in question were tied to the bank’s commitment nearly a decade ago to consider minority candidates for job openings following a racial discrimination lawsuit filed by black asset management employees.

The New York Times’ report on the practices included information from 12 current and former employees who participated in, helped organize, or were aware of the fake interviews. Following the initial story, 10 more current and former employees shared evidence showing how the app works. In one email, a human resources employee asked a new hire for one role who was considered “different” by bank standards to fill out an application for another role. “For us, just keeping accounting is enough,” the HR representative wrote, according to The Times.

The climate around corporate diversity, equity and inclusion has changed since Bruno first raised the issue at Wells Fargo; President Donald Trump has criticized DEI as little more than discrimination against white men. The effort at Wells Fargo is aimed at expanding the talent pool the bank can draw on to fill open positions, Friedman said.

Bruno said he would rely on Friedman’s advice on whether to take the case to trial or consider a settlement if the bank offered it.

“I want to see change,” he said. “And if that means rejecting any deal and going to a jury trial, then I don’t see any harm in that.”

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