Government orders Wells Fargo to reinstate whistleblower

By Pete Schroeder

(Reuters) - The federal government has ordered Wells Fargo (NYSE: WFC) to reinstate a former bank manager who lost his job after reporting suspected fraudulent behavior at the bank.

The Labor Department's Occupational Safety and Health Administration (OSHA) announced on Monday that the bank must rehire the employee, as well as pay back wages, compensatory damages and attorneys' fees totaling $5.4 million.

OSHA concluded that the manager was "abruptly" forced to leave a Los Angeles branch of the bank in 2010, after he told superiors he suspected two of his subordinates of bank, mail and wire fraud. The manager also called the bank's ethics hot line. OSHA determined his whistleblowing was "at least a contributing factor in his termination." The manager was not named.

The bank is planning to request a full hearing on the OSHA decision before the Labor Department's Office of Administrative Law Judges. Such a step will not halt the initial reinstatement order.

“We take seriously the concerns of current and former team members. This decision is a preliminary order and to date there has been no hearing on the merits of this case. We disagree with the findings and will be requesting a full hearing of the matter,” said Vince Scanlon, a bank spokesman.

According to OSHA, the manager had previously received positive job performance appraisals, but in 2010 he was told he had 90 days to find a new job at the bank after being dismissed as a manager. He was unable to do so and was terminated, and has not found work in banking since.

The manager worked in Wells Fargo's wealth management group, according to the bank.

The OSHA decision is unrelated to the bank's woes surrounding the creation of potentially millions of fake accounts by employees looking to hit sales goals. In that case, the bank has also come under scrutiny over whether it punished whistleblowers that notified superiors of wrongdoing involving Wells Fargo employees.

(Reporting by Pete Schroeder; Editing by Tom Brown and Steve Orlofsky)

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