Berber v. Wells Fargo
Posted on Categories Business & Employment, Court Decisions

By Samuel B. Edwards

Appellate Court affirms district court’s dismissal of retaliation and RICO claims for an employee of Wells Fargo fired for not meeting sales expectations.

Berber vs. Wells Fargo, No. 19-10661 (11th Cir., 1/8/20).

Appellant Berber was an employee of Wells Fargo bank from July 20013 through March 2014, when she was fired, according to Wells Fargo, because she “had not met performance expectations for her position, and had not performed what were termed ‘daily activities to attain sales goals.’” Well after her termination, the Consumer Financial Protection Bureau began a very public investigation where Wells Fargo was accused of fraudulently opening customer accounts and applying for credit cards on behalf of customers without their consent. This ultimately resulted in Wells Fargo paying a large settlement for this alleged illegal activity. Upon the announcement of the investigation, Berber filed her claims against Wells Fargo, arguing that she was fired “for refusing to participate in these sales practices ….” Berber claimed her termination was a violation of Florida’s Whistleblower Act (“FWA”) and the Florida RICO statute. The district court dismissed Berber’s RICO claims for failure to state a claim and later granted summary judgment on her FWA retaliation claim.

Berber’s principal argument is that she could not meet the sales obligations of Wells Fargo without engaging in illegal activities and, therefore, she was de facto terminated for refusing to break the law. However, “Berber admits she never was personally asked to engage in any fraudulent sales practices or directly encouraged to do so ….” Rather, Berber argues, “we were indirectly pressured to engage in fraud, because the sales goals were so high as to be otherwise unattainable.” Based on that argument, the Court first looked at the FWA claim. Under the Florida FWA, someone asserting a claim must be able to demonstrate they “engaged in a statutorily protected activity ….” Here, Berber claimed she “refused” to engage in illegal activity and was terminated for that refusal. However, the evidence supported that Berber did not “refuse” to do anything illegal. In fact, according to the Court, “Berber also admits she never refused a request to engage in fraud.” Rather, her argument is that “she felt vaguely ‘pressured to generate sales.’”

The Court analyzes the word “refuse” and finds that the “passive inaction” that Berber alleges is not a “refusal.” Rather, the Court holds that, under the FWA, refusal requires a “positive unwillingness to participate in the fraud.” At most, Berber “felt vaguely ‘pressured’ to increase her sales, and she did not engage in illegal acts to alleviate this pressure.” The Court refuses to extend whistleblower protections that far, finding, instead, “[i]t is a momentous leap to claim that a failure to respond to general pressure to increase sales somehow transforms into an active refusal to commit fraud under the FWA.” As a result, the Court affirms the decision of the district court granting summary judgment on the FWA claim.

The Court then confronts Berber’s RICO claim, which had been dismissed for failure to state a claim. In particular, the district court found there was no “proximate cause” between the alleged illegal scheme and the injury to Berber, her termination. According to the Court, there has to be a “direct relation between the injury asserted and the injurious conduct alleged.” In this case, the alleged illegal conduct was “against Wells Fargo customers,” not Wells Fargo employees. Berber argues that a “side effect of the fraud on customers [was] she was fired for not similarly committing fraud.” According to the Court, “[t]his is, at best, a tenuous causal chain …” and therefore not the “direct” cause required under the law regarding RICO suits. As a result, the dismissal for failure to state a claim was correct, as Berber failed to “plausibly allege proximate cause between her injury (termination) and the predicate criminal act (committing fraud on customers).”

(S. Edwards)

(SOLA Ref. No. 2020-06-02)

NOTICE: The court decision synopsis published above represents an abbreviated description of the actual decision and is re-printed here for its educational value. The author's effort is to report concisely the substance of the decision or a selected portion of the decision; commentary or analysis is generally reserved for the italicized section at the bottom of the summary. Subscribers to SAC's Online Litigation Alert (SOLA), from which this synopsis is excerpted, have immediate access to the full decision, in addition to the synopsis. 

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