Wells Fargo has put an end to a
Both sides say they reached a settlement this month, though its terms are confidential. The agreement signals a possible shift in legal strategy for Wells as it appears to be the first instance in which the bank has voluntarily ended one of
It remains to be seen whether the settlement has an impact on other cases, including that of an
Wells in late 2016 paid $185 million in regulatory fines and admitted guilt for opening accounts under customers' names without their consent. Five years earlier Ponce de Leon informed the bank and regulators about the widespread deceptions at branches where she worked in Southern California. The bank fired her three weeks after she first called the bank's ethics line in 2011, and after having promoted her to positions of greater authority 10 times over the course of a decade, according to Department of Labor documents.
After the department last year ordered Wells to immediately reinstate her and the Los Angeles money manager and pay them back wages and other damages, the bank vowed to appeal both decisions.
But it changed course when it came to Ponce de Leon by finalizing a settlement with her on Jan. 12, her lawyer Yosef Peretz said Friday. He declined to comment on the details of the agreement itself. Ponce de Leon did not respond to a request for comment.
Wells also declined to comment on the substance of the settlement, saying only that "the matter has been resolved by mutual agreement of the parties."
Taking the case further might have been too much of a gamble for Wells, which has drawn immense negative publicity for its business practices, an expert said.
"Wells Fargo may have foreseen massive exposure if the case were tried before a jury," says whistleblower lawyer Jason Zuckerman, who was not involved with the case. "The bank is well aware that she would have had the option to go before a jury in federal court. And, because this scheme was well known, one can expect that an average juror would be highly motivated to hold the bank accountable for retaliating against a whistleblower who tried years ago to halt it."
In fighting the complaint that Ponce de Leon lodged against the bank with the Labor Department's Occupational Safety and Health Administration, Wells had accused her of drinking excessively and other inappropriate behavior.
"It is typical for an employer defending a whistleblower case to impugn the whistleblower’s credibility and motive," Zuckerman says. "But I have also found that attempts to create post hoc justifications for a retaliatory termination often backfire."
In any case, OSHA did not find the bank's argument credible. Last year, it awarded her $577,000. Separately, OSHA ordered Wells to pay the unnamed Los Angeles wealth manager the highest award in OSHA's history, $5.4 million.
Up until this month, the bank had not paid either whistleblower anything as its appeals to those decisions proceeded.
Last year Sen. Elizabeth Warren, D-Mass.,