Fowles v. Wells Fargo Bank NA

In 2018, Wells Fargo's former foreign exchange trading group sued the bank claiming he'd been fired for complaining about its compensation scheme, which he said incentivized the exchange sales team to "make false and misleading representations to customers ... and to enrich themselves at the expense of clients."

In December, a San Francisco judge tossed out Fowles' lawsuit with a summary judgment ruling that the former trader actually had been fired, in essence, for his part in making false and misleading representations to customers himself. Fowles v. Wells Fargo Bank NA, CGC-18-565709 (S.F. Super. Ct., filed April 11, 2018).

Malcolm Heinicke, the bank's lead attorney in the case, said he was proud that he and his colleagues were able to succeed even after a decision from the state Supreme Court a year ago made it harder for employers to defeat wrongful termination actions alleging whistleblower retaliation.

"In that way, this is sort of a cutting-edge case because we're one of the first cases applying this new standard," Heinicke said.

Fowles' attorney, Daniel Feder, did not respond to an email seeking comment on the case.

The lawsuit traces back to Burger King's purchase in 2014 of the Tim Horton's restaurant chain. To buy the Canadian company, Burger King needed Canadian dollars, and it retained Wells Fargo to buy about $4 billion worth as part of the deal. As the bank's foreign exchange department worked on the purchase, Fowles and four others spoke by phone to plot out a way to "increase Wells Fargo's profit by reporting an artificial exchange rate to the client," the judge wrote in his Dec. 19 order.

The call was recorded automatically. The bank discovered the recording in mid-2017 and soon fired Fowles and the others.

In his lawsuit, Fowles claimed he was fired in retaliation for his complaints about the compensation scheme. He had, in fact, raised concerns about it as early as 2013. But when bank investigators confronted him with the call recording, he admitted that it sounded like "witches around a pot trying to carve stuff up."

Bryan H. Heckenlively

When Heinicke's colleague Bryan Heckenlively deposed Fowles, the ex-trader made a number of admissions that Ross quoted in his ruling, including that during the 2014 call, Fowles asked the sales personnel to "tell us ... how much money you want to make on this trade."

Shortly after the bank's attorneys filed their summary judgment motion, the state Supreme Court changed the rules for wrongful termination suits by alleged whistleblowers. Heinicke and his team had to refile their motion to show by clear and convincing evidence that the bank would have fired Fowles irrespective of his complaints about the compensation scheme.

One point on their side was that the bank had changed the compensation program before it dismissed Fowles, "so there was no reason for the bank to retaliate against him," Heinicke said.

But in any event, the judge ruled, the defense team had come up with all the clear and convincing evidence it needed.

"I'm proud of the result because we vindicated the bank's actions here," Heinicke said. "It's now clear that the bank acted appropriately."

Wells Fargo has had more than its share of problems over the last several years. "I'm grateful to the judge that he looked past unrelated issues and focused on the facts of this case," he said.

Fowles agreed not to appeal in exchange for a waiver of costs and fees.

-- Don DeBenedictis