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Key Considerations for Your Whistleblower Program

The news is replete with accounts of the Wells Fargo scandal. According to the Consumer Financial Protection Bureau (CFPB), Wells Fargo employees engaged in a widespread scheme intended to boost their incentive compensation by secretly opening unauthorized deposit and credit card accounts for some of the bank’s existing customers. According to the CFPB’s Sept. 8, 2016, press release,1 bank employees were able to exploit existing customer relationships by opening fake accounts and fraudulently authorizing banking services for these victimized customers. It appears that some of the victimized customers suffered direct financial losses through fees incurred on these unauthorized services and accounts. As concerning as these facts are, the Wells Fargo story may get even worse. 

New allegations are surfacing from former Wells Fargo employees who say that they used the bank’s ethics line to report these unethical sales practices and then suffered for it.2 Some of these former employees claim that they were fired and others claim that they were demoted in retaliation for using the bank’s whistleblower reporting process. There are at least two employee lawsuits based on the bank’s conduct towards those who objected to the scheme.3 According to an online Fortune article, at least one Wells Fargo employee used the bank’s ethics line to inform the bank that some of its employees were forging customer signatures and improperly opening accounts as early as 2005.4 The reporting employee was later fired and considers her discharge retaliation for making the report. The claims of whistleblower retaliation add another layer of concern for the employees involved, the bank, and those customers whose accounts were exploited. Could responsible gatekeepers at the bank have been alerted to the unethical sales practices and stopped the schemes earlier if these whistleblower reports been handled differently?

Wells Fargo’s handling of the employee reports will be on ongoing story and an acute reminder of the critical importance of a company’s administration and enforcement of its whistleblower program - including the promise of protection from retaliation. Protecting the whistleblower from retaliation is the law after all, and we might go so far as to call it a covenant between employer and employee. The company needs to know what the whistleblower knows in order to address claims of potential wrongdoing and the whistleblower must be protected for shedding light on conduct that violates company policy. Unless the company prohibits retaliation and protects those employees willing to use the reporting process, misconduct, even illegal conduct, may go unchecked. With such a critical control at stake, it makes sense for every employer to assess the components of its whistleblower program including its processes to protect reporting employees from retaliation. 

Key Components of a Successful Whistleblower Program

  • The whistleblower policy must be written in plain language. The policy should provide for multiple channels for reporting and clearly explain the company’s process after a report of potential wrongdoing is received. The policy must set out a commitment by the company to treat the report confidentially to the fullest extent possible while still conducting a thorough inquiry. Finally, there must be an unambiguous promise to protect employees who make a good faith report and those who cooperate with the company’s inquiries from any retaliation flowing from the use of the company’s reporting process. 
  • Each person in the reporting channel must be well trained on their role as a recipient of a whistleblower report. Most companies list managers as an appropriate reporting channel within the company’s whistleblower program, so it is critical that managers are well trained and can recognize a report of possible wrongdoing and know how to handle a report when it is received. 
  • The program must ensure that the company has a documented investigative process that includes investigative standards and processing goals. Well-trained, investigative resources must ensure that the standards and goals for investigations are met.
  • The reporting and investigation process must be open to an independent audit to objectively ensure that standards and goals the company has set for its investigations are met. 
  • The program must ensure that the company’s non-retaliation policy is covered in manager training and appropriate employee communication.
  • Importantly, the progam must require that the same investigative rigor is applied to claims of retaliation as to other reports of policy violations received.
  • The program should include a mechanism for follow-up with reporters and those who cooperate in the company’s inquiries for a designated period of time to inquire about their post-report work experience. Flag reporters’ personnel files for monitoring to ensure that any negative employment action is both objectively justified and appropriately documented.
  • Treat proven violations of the non-retaliation policy as serious misconduct. 

The Wells Fargo allegations are a reminder that fraud and other wrongdoing within companies have high impact consequences. With the development of a new whistleblower program or the review and update of an existing plan, employers are better positioned to expose unethical behavior and practices and protects those employees who report such incidents or patterns from retaliation.

1Consumer Financial Protection Bureau Fines Wells Fargo $100 Million for Widespread Illegal Practice of Secretly Opening Unauthorized Accounts,” Consumer Fraud Protection Bureau, Sept. 8, 2016, 
2Stacy Cowley, “Wells Fargo Workers Claim Retaliation for Playing by the Rules,” New York Times, Sept. 26, 2016, 
3Matt Egan, “Fired Wells Fargo workers fight back with federal lawsuit,”, Sept. 27, 2016,
4Reuters, “Wells Fargo Employees Have a History of Suing the Bank,”, Sept. 29, 2016,