Schaufler v. Wells Fargo Bank N.A.

Wrongful termination, Retaliation

San Francisco County

Superior Court Judge John K. Stewart

Malcolm Heinicke

Defense Lawyers: Munger, Tolles & Olson LLP, Malcolm A. Heinicke, Bryan H. Heckenlively, Erin J. Cox, Caroline C. Litten; Dane P. Shikman

Plaintiff's Lawyers: Brown Poore LLP, Scott A. Brown; Law Office of Daniel Horowitz, Daniel A. Horowitz

People remember the 1979 horror movie "When a Stranger Calls" for the line "We've traced the call, it's coming from inside the house."

Forty years later, Wells Fargo Bank defended itself from a wrongful termination lawsuit with a slightly less memorable line: "Plaintiff did not have a reasonable expectation that the August 27, 2014 telephone call at issue would not be recorded."

"When we, on behalf of the bank, confronted the lawyers on the other side with this tape that revealed the misconduct that led to their terminations, the response was not 'You're not understanding the tape correctly' or 'The tape says something other than what you say,'" said Munger, Tolles & Olson LLP partner Malcolm A. Heinicke.

"Their response was to file a lawsuit to keep the tape out of evidence," he added.

The matter was a side case to a $30 million wrongful termination lawsuit filed by a pair of former executives. The bank claims they were let go due to misconduct related to a foreign transaction.

Winning the case over the tape wasn't as easy as one might think, Heinicke said. Defense lawyers failed to stop the complaint on summary judgment and had to go to trial. Schaufler v. Wells Fargo Bank N.A., CGC-19-572560 (S.F. Super. Ct, filed Jan. 4, 2019).

Bryan Heckenlively

Wells Fargo lacked key pieces of evidence that could have helped, such as a signed acknowledgment from the plaintiff that he knew his work calls could be recorded. The calls also didn't feature the telltale beeps or clicks sometimes used to remind callers they are being recorded.

But Heinicke and his team showed that because of the industry he was in, the plaintiff should have known his calls from inside the office weren't confidential. Wells Fargo's training programs also warned students this was the case.

"In the highly regulated area of bank transactions, everyone knew that such calls were recorded," Heinicke said.

He also praised the work of his younger colleagues, calling that "absolutely the most gratifying" aspect of the case. Heinicke said Dane P. Shikman did excellent work examining witnesses. Caroline C. Litten, who had passed the bar but not yet received her bar number, argued many of the early motions.

In January 2020, a San Francisco County Superior Court jury took just an hour to decide in favor of Wells Fargo, which was awarded court costs. The bank can also use that call as evidence in the underlying case, which is ongoing.

Scott A. Brown, who represented the plaintiff as a partner with Brown Poore LLP, did not respond to an email seeking comment.

-- Malcolm Maclachlan