Wells Fargo’s Senior Management Must Be Held Responsible for Bank Fraud

The arrogance of Wells Fargo was apparent when it announced earlier this month that it would phase out a questionable “sales goals” program in Jan. 2017. Those sales goals created the incentive for 5,300 Wells Fargo employees (since fired for ethical violations) to create some 2 million fraudulent customer bank accounts. The bank announced Wednesday that it will discontinue the sales goals by the end of the week. Meanwhile, eEx-Wells Fargo employees  filed a class action lawsuit seeking $2.6 billion in damages. Finally, on Oct. 12, 2016, John Stumpf  abruptly “retired.” Stumpf reportedly did not get any severance but will retain more than $100 million in vested stock, plus accumulated pension and 401(k) benefits exceeding $24 million –  Ed.

A few years ago, I opened an account at a local branch of Wells Fargo Bank for a limited purpose. Once that purpose was accomplished, I intended to immediately close the account.

A young bank officer who facilitated the transaction persuaded me to keep the account open. He assured me that he had set up my account in such a way that I would never lose the account balance of $100 deposit through the churning of bank fees.

Of course, in less than a year, all the money was gone, usurped by Wells Fargo in bank fees. Meanwhile, I was assaulted  with notices, offers and credit card applications. One paper in this mountain of paperwork may have contained an obtuse notice that my account was being transferred to a different charge-bearing vehicle. I complained to the bank, which said it was my fault, and then I put the matter behind me, chalking it up to yet another example of pervasive and persistent financial fraud in America.

So this week, it was with interest that I read about the Wells Fargo’s practice of using unrealistic sales goals to pressure employees to set up phony accounts and cheat customers. The bank has fired 5,300 employees for ethical violations and announced it would eliminate all product sales goals in retail banking, effective January 1, 2017.

Seriously?

Remember the financial crisis of 2007, which propelled the world into a deep recession, from which many will never recover?  How much of the Wall Street meltdown was due to unethical practices promulgated by massive financial institutions ( like Wells Fargo) which required workers to lie, cheat, and steal  in order to remain on the payroll?

Why is John Stumpf, Chairman and CEO of Wells Fargo, still working there?

Senior management of Wells Fargo is responsible for the fraud on its customers, not the underlings with families to feed in an unforgiving economy.  The bank employees who were fired for ethical violations are culpable and shouldn’t be working in a position of trust. But Wells Fargo created the incentive for the unethical behavior  of its employees by adopting unrealistic sales goals to increase profits year after year.  Indeed,  Wells Fargo plans to continue enforcing these “product sales goals” until January 2017.

If America permits the senior management of Wells Fargo  to scapegoat its own employees and avoid responsibility for financial fraud, aren’t we inviting another financial meltdown?  Haven’t we learned anything?

Wells Fargo CEO John Stump needs to go. IMMEDIATELY!

The bank has been fined $100 million by the U.S. Consumer Finance Protection Bureau and ordered to pay back consumers harmed by its actions.

Wells Fargo & Company, headquartered in San Francisco, is one of the nation’s biggest banks. It has $1.9 trillion in assets and, according to the company, serves one in three households in the United States. Wells Fargo & Company was ranked No. 27 on Fortune’s 2016 rankings of America’s largest corporations.

Outfoxed: Carlson Settles for $20 Million & Apology

Former Fox News Anchor Gretchen Carlson  has received among the largest payouts in history  – $20 million – to settle a sexual harassment case.

Ironically, the case was settled not by the defendant, former Fox News chairperson Roger Ailes, but by his former employer, 21st Century Fox, the parent company of Fox news.  Ailes, 76, won’t pay a dime. (Not only that,  Ailes received a $40 million payout from Fox when he left his job under pressure in July.)

It is speculated Tuesday that Carlson, a former Miss America,  secretly tape recorded Ailes, whom she alleged refused to renew her contract after she refused to have sexual relations with  him.

The largest sexual harassment award in history is believed to have occurred in 2011 when a federal jury in Tennessee awarded $95 million to Ashley Alford, a young employee who was  sexual  harassed and physically assaulted by a supervisor  at the rent-to-own company, The Aaron’s Inc. The award included $15 million in compensatory damages and $80 million in punitive damages. U.S. District Court Judge J.  Michael Reagan subsequently reduced  the amount the jury awarded Alford on the sexual harassment claim from $4 million to $300,000 pursuant to a federal statutory cap. on damages under Title VII of the Civil Rights Act. Judge Reagan also vacated $50 million of the punitive damages award. That still left Alford with about $41 million.

In addition to the monetary award, 21st Century Fox issued a press release stating:  “We sincerely regret and apologize for the fact that Gretchen was no treated with the respect and dignity that she and all of our colleagues deserve.”

Meanwhile, two other women at Fox reportedly were offered settlements after complaining about sexual harassment.

Carlson’s complaint appears to have prompted the sudden departure of Fox personality Greta Van Susteren from the network on Tuesday. Susteren had publicly defended Ailes and accused Carlson of retaliating against Ailes after  being fired due to poor ratings.

Carlson received little support generally from her former Fox colleagues. In addition to Van Susteren, more than a dozen top personalities at Fox News including Sean Hannity, Neil Cavuto and Kimberly Guilfoyle defended Ailes against claims of sexual misconduct.

EEOC Pitches Lack of Diversity in the Tech Industry as an “Innovation Opportunity”

*NOTE:  The EEOC issued a report at its meeting (discussed below) that completely ignored age discrimination except for a footnote stating that more research on age discrimination is needed. According to the report,  compared to overall private industry, the high tech sector employed a larger share of whites (63.5 percent to 68.5 percent), Asian Americans (5.8 percent to 14 percent) and men (52 percent to 64 percent), and a smaller share of African Americans (14.4 percent to 7.4 percent), Hispanics (13.9 percent to 8 percent), and women (48 percent to 36 percent). WHAT ABOUT AGE? Ed.

After more tGoogle_Mountain_View_campus_dinosaur_skeleton_'Stan'han a decade of ignoring rampant and blatant age discrimination in the tech industry (and everywhere else), the issue appears has surfaced on the EEOC’s radar screen. But it is not  seen as an overly-ripe target for enforcement of older workers civil rights. Rather, it is couched as an “innovation opportunity.”

The EEOC has announced it will hold a meeting in Washington, DC, on Wednesday entitled, “Innovation Opportunity: Examining Strategies to Promote Diverse and Inclusive Workplaces in the Tech Industry.”

While it might be hoped the EEOC would actually enforce the Age Discrimination in Employment Act (ADEA), the Agency deserves credit for acknowledging that age is a diversity issue, which is something that Silicon Valley  stubbornly refuses to acknowledge. Also, the EEOC deserves major kudos given that the Obama administration  for the past eight years, has treated older workers  like an obstacle to diversity and not a group that deserves equal rights under the law.

One of the invited panelists for Wednesday’s meeting is an attorney from the AARP Foundation, which is an organization that the EEOC apparently entrusts to be polite about the EEOC’s regulatory lapses during the past decade. The AARP Foundation almost has to be polite because it’s mothership is the the monolithic AARP, which also has done little to advocate for older workers by combating age discrimination. Moreover, the AARP is reaping billions  from the sale of Medigap health insurance after having lobbied to keep Medigap reforms out of Obamacare. The AARP receives  an estimated 4.95 percent of every dollar that seniors spend on its Medigap plans. These fees are reportedly double the income the AARP receives from “membership:” dues.  A study by the Kaiser Family Foundation found that Medigap reforms blocked by the AARP would have saved the average senior as much as $415 in premiums per year.

It is perhaps not surprising that my name does not appear on the EEOC’s guest list.

My groundbreaking 2014 book, Betrayed: The Legalization of Age Discrimination in the Workplace, criticizes the systemic inequality of older workers in American society, especially in Silicon Valley. I note that the ADEA was weak to begin with and  then was further eviscerated by the U.S. Supreme Court. Meanwhile, Congress has done nothing to insure equal rights for older workers. I also  criticize the EEOC  for failing to combat an massive increase in age discrimination complaints since 1998 and I point out that President Barack Obama signed a devastating executive order in 2010 that actually legalizes age discrimination in federal hiring.

I may be alone in the U.S. in reporting that the EEOC itself stands accused of engaging in systemic age discrimination in hiring

Earlier this year I  reported that the U.S. Chamber of Commerce  filed a friend-of-the-court brief in an age discrimination case in which it defended employers who practice age discrimination in hiring by noting that the EEOC does the very same thing.  The Chamber cited the EEOC Attorney Honor Program, which employs in “permanent” positions “third-year law student[s], “full-time graduate law students[s],” and “Judicial Law Clerk[s] whose clerkship must be [their] first significant legal employment following [their] graduation.”  The EEOC states on its web site that graduates of the Honor Program go on to serve as trial attorneys or Administrative Judges in the EEOC’s District Offices. Since the vast majority of recent law clerks and law and graduate students are under the age of 40, it is not a stretch to conclude that the  EEOC program has a disparate impact upon attorneys who are aged 40 and above.  That’s supposed to be illegal under the ADEA.

Criticism of an administration or federal agency often is dismissed as partisan politics.  I do criticize  the Obama administration, the U.S. Supreme Court and Congress for abandoning older workers during the worst recession in 100 years.  Millions of older Americans remain subject to pervasive discriminatory hiring practices and bogus layoffs and restructurings. I do not argue, however, that the Republicans would have done better than the Democrats. I simply don’t think they could have done much worse. That’s why I support Bernie.

Why Things Keep Getting Worse for Workers

Author Thomas Frank in his new book, Listen Liberal: Or, What Ever Happened to the Party of the People, posits that wealth equality worsened during the Obama administration because the so-called party of the working class has been co-opted by a “professional class” of  hyper-educated elite.

He argues –  very convincingly in my opinion – that America is now governed by two political parties, neither of which represents the interests of average workers. This, he says, is why Americans are flocking to outsider Presidential candidates like Donald Trump and Bernie Sanders.

Franks says the Republican Party represents the rich while the Democratic Party represents a  hyper-educated professional elite, many of whom hail from exclusive Ivy League universities.  The class includes a broad swath of professionals, from lawyers and doctors to economists and Internet entrepreneurs.

The Democratic professional class is  liberal on cultural issues, writes Frank, but  NOT when it comes to worker rights.

He cites President Bill Clinton’s strong support for NAFTA, which served the interests of professionals at the expense of  average workers.  He said NAFTA further dis-empowered workers, already reeling from anti-union policies, because it gave companies incentive to pick up stakes and move.

Frank criticizes Obama for bailing out the banks during the Great Recession without prosecuting Wall Street law breakers. He notes the Roosevelt Administration moved frequently to break up big banks and fired Wall Street executives.

Frank also contends that  “Big Medicine” and “Big Learning” are slowly bankrupting America.  With respect to “Big Learning,” he said tuition rates have risen exponentially while more and more PhDs are forced to  work as non-tenured adjunct professors earning about $1,500 per course.

In an excellent interview by Kathy Kiely on Bill Moyers web site, Moyers & Company, Frank calls Bernie Sanders a badly needed voice of discontent in the Democratic party, the only one who is raising issues about monopoly and anti-trust, fair trade, inadequate health care, out-of -control college tuition, etc.

If Sanders is not a candidate in November, Frank said he will vote for Hilary Clinton over Trump, though unenthusiastically.

‘Transgender’ Now Accorded More Protection than ‘Age’

There is a national movement going on right now to boycott states that force transgendered individuals to use the restrooms of their biological sex rather than their chosen identity.

Many companies, including  Target, have denounced  laws that restrict  a transgender individual’s choice of bathroom as sex discrimination.  Some major American corporations  have threatened to withdraw from North Carolina because it has limited the right of transgendered individual to use their bathroom of choice. Moreover, a three-judge panel of the U.S. Court of Appeals for the 4th Circuit recently voted 2-1 to uphold the  U.S. Education Dept.’s position that it constitutes illegal sex discrimination to exclude transgender students from the bathrooms of their chosen gender identities.

According to the most frequently cited estimate, 700,000 people in the United States, or about 0.2 to 0.3 percent of the population, identify as transgender.

Compare this to the millions of older workers who each year are subject to epidemic and overt age discrimination in employment with nary a hint of protest or outrage from anyone, including organizations that purport to advocate for older Americans and civil rights.

 Indeed, at this point, transgender people technically have greater rights under the law than older workers to be free from invidious discrimination.

The U.S. Equal Employment Opportunity Commission contends that trangendered individuals are protected by Title VII of the Civil Rights Act of 1964 (Title VII), which prohibits discrimination on the basis of race, sex, religion, national origin and color. By contrast, age discrimination falls under the Age Discrimination in Employment Act of 1967, (ADEA), which permits “reasonable” age discrimination by employers.   Title VII also contains penalties that are far more onerous than those of the ADEA.

Why have the rights of millions of older Americans to be free from irrational and harmful employment discrimination been ignored for 50 years?

The rights of transgendered individuals are at issue today because advocates in  the gay and lesbian communities and in the entertainment community have taken a public stand to combat ignorance and prejudice against transgendered individuals. This has essentially forced major corporations to adopt policies prohibiting discrimination against the transgendered so as not to be seen as endorsing transgender discrimination.

Alas, the same is not true for older workers.

No one is demanding that Congress  or the courts accord equal rights to older workers under the law, including the AARP, the EEOC  and the American Civil Liberties Union.  Meanwhile, the same corporations that demand rights for the transgendered are engaging in systemic age discrimination.

The plight of older workers began in 1964  when Congress refused to include age as a protected class in Title VII.  After three years of lobbying by business interests, Congress passed the ADEA, a severely watered down version of Title VII that  has exposed generations of older Americans  to wholesale and perfectly legal age discrimination in employment, especially in hiring.

There also is little public sympathy for older workers.  Stereotypes about older people are profoundly negative  (i.e. rigid, feeble, depressed). Older workers often are seen by younger workers as impediments to job advancement and limited resources. Employers, including the U.S. government, treat older workers like an obstacle to a more diverse workforce. Moreover, researchers say many people subconsciously associate aging with death and disease.  There also is little understanding about the long-term and severe impacts of age discrimination, which condemns millions of women  to decades of poverty in their later years.

Of course, these observations are not meant to begrudge transgender individuals their basic human right to be treated with dignity and respect but simply to point out that older Americans too deserve to be free from invidious and harmful  discrimination.  If every type of irrational and harmful  discrimination is treated with the same degree of condemnation and outrage, there will be far less discrimination against all Americans, including transgendered individuals.

Hulk Hogan v. Two Alleged Age Discrimination Victims

A review of the New York Times today provides a stark demonstration of the arbitrary way that society assesses damage to individuals.

There is a front page story about a Florida jury verdict ordering Gawker.com to pay wrestler Hulk Hogan $115 million in damages for publishing a grainy security video depicting Hogan having sex with a friend’s partner. Of that amount, $55 million was for economic harm and $50 million was for emotional distress. (Hogan subsequently was awarded an additional $25 million in punitive damages.)

Another story, featured in the business section, chronicles the demoralizing travails of Julianne Taaffe, 60, and Kathryn Moon, 65, who taught English as a second language (ESL) at Ohio State University for decades until they were forced to retire as a result of an alleged campaign of illegal age discrimination and harassment.

The maximum damage award permitted under the Age Discrimination in Employment Act (ADEA)  is a total of two-times the amount of monetary damage suffered by the plaintiffs.  The ADEA does not permit plaintiffs to recover damages for emotional distress or punitive damages,  though these damages are permitted under Title VII of the Civil Rights Act, which prohibits discrimination on the basis of race, sex, religion, color and national origin. So if Taaffe and Moon’s case ever gets to a jury  the most they could recover is whatever salary and benefits they lost, possibly doubled.

And while the evidence against OSU is what some would call overwhelming, it is far from certain that Taaffe and Moon’s lawsuit ever will reach a jury.  Taaffe and Moon were forced to sue five Ohio State University (OSU) officials individually rather than the university because the U.S. Supreme Court in 2000 ruled that  the concept of  sovereign immunity prevents an award of monetary damages in federal lawsuits against state agencies (including universities).   OSU has filed a motion to dismiss the lawsuit on the grounds that the ADEA does not permit plaintiffs to sue individual government employees.

Taaffe and Moon claim in the lawsuit that OSU systematically drove out older teachers in the university’s English as a Second Language Program. Continue reading “Hulk Hogan v. Two Alleged Age Discrimination Victims”

Discrimination Victims Deserve REAL Justice

The EEOC has asked for public input so here goes:

Why is the EEOC operating the equivalent of a “get out of jail free card” for employers that engage in employment discrimination and retaliation?

When the EEOC determines there is reasonable cause for a charge of discrimination, the agency offers the employer (and the victim) the opportunity to participate in its free mediation program, where a neutral mediator assists the parties in reaching an early and confidential  resolution to a charge of discrimination.

In its 2014 performance report, the EEOC contends the mediation program is a “win for both Employees and Employers” but in the final analysis it is a much bigger win for employers.

The EEOC says its mediation program for private sector complainants  achieved a resolution in 7,846 out of a total of 10,221 mediations conducted for all types of discrimination.  The effort yielded $144.6 million in monetary benefits for complainants. Simple division indicates the EEOC’s mediation effort yielded $18,430 per mediation for private sector workers in 2014.

A payout of less than $20,000 per mediation is a bona fide windfall for employers, who might otherwise be forced to spend a hundred thousands dollars or more to defend a lawsuit, plus a potentially staggering damages award.

But $20,000 is a pittance at best for many – if not most – victims of employment discrimination – especially those who lost their jobs or who were not hired because of illegal discrimination.

There’s the rub

The EEOC is not supposed to be in the business of protecting discriminatory employers from the reasonable consequences of their harmful actions. Continue reading “Discrimination Victims Deserve REAL Justice”

Worker Entitled to a Fair Investigation (in the UK)

justice-scale-761665_1In the United States, so-called workplace investigations can be little more than pre-trial preparation for employers intent upon building a record to justify dismissing a troublesome worker.

It is refreshing to note a recent  decision by the London-based Employment Appeal Tribunal (EAT)  finding  a breach of an implied term of trust and confidence where an agency’s Human Resources Dept. interfered in the outcome of an investigation of employee misconduct.

In Ramphal v. Department for Transport,  a manager  was investigating alleged misconduct by an aviation compliance inspector, who allegedly filed a false expense report.  The manager’s initial report concluded that any abuse was not deliberate. After the manager sought advice from HR, he switched his recommendation that the employee receive a written warning for misconduct to a recommendation that the employee  be summarily dismissed for gross misconduct.

The EAT said the lower court erred when it failed to determine whether HR had exerted “improper influence” over the manager’s decision to dismiss the worker

The EAT said a worker facing disciplinary charges and a dismissal procedure “is entitled to expect that the decision will be taken by the appropriate officer, without having been lobbied by other parties as to the findings he should make as to culpability.”

According to the  EAT:

“… an investigating officer is entitled to call for advice from human resources; but human resources must be very careful to limit advice essentially to questions of law and procedure and process and to avoid straying into areas of culpability, let alone advising on what was the appropriate sanction….. It was not for Human Resources to advise whether the finding should be one of simple misconduct or gross misconduct”.

In the United States, most workers who do  not belong to unions or receive the protection of an employment contract can be fired for almost any reason – without any cause –  as long as the reason doesn’t break an actual law (i.e. discrimination)  or a narrowly defined public policy (i.e. protection for whistleblowers).  There is no legal requirement that employers treat workers with respect, dignity and fundamental fairness.  Of course, employers who are not fair  risk significant liability if the worker later files a lawsuit alleging a violation of the law, such as a race or sex discrimination lawsuit.

The Employment Appeal Tribunal is a superior court of record in the United Kingdom that hears  appeals from Employment Tribunals in England, Scotland and Wales.

Progress? Obama Acknowledges the “Elderly”

ObamaOnce again, President Barack H. Obama, in his 2016 State of the Union address, describes an America that is populated by “hard-working families,” immigrants and select  minorities.

But at least this year older Americans were not entirely invisible. He made two fleeting references to older Americans, which is two more than he made in his 2015 address.

Pres. Obama, 54, said Social Security and Medicare are “more important than ever. We shouldn’t weaken them. We should strengthen them.” (Unfortunately, he didn’t say what, if anything, he would do to accomplish this goals.)

And Pres. Obama applauded the “elderly” woman who waits in line to cast a vote as long as she has to.

FYI, Pres. Obama – the term ‘elderly’  is  frowned upon today as a descriptor for older Americans because it evokes images of frailty, sickness and decline. The term reflects underlying attitudes about aging that are stereotypical and negative. “Elderly” certainly doesn’t describe the millions of older Americans (like you!) who are vital, energetic and very much engaged in life. The International Longevity Center advises journalists to use the term “older adult”  to describe Americans over the age of 50. Good advice.

Obama completely ignored older Americans last year, which was not entirely surprising given that he has ignored older Americans for the past seven  years.

The Obama administration has not represented a period of enlightenment regarding older Americans.  Obama is the first American president, at least in modern times, to actually endorse age discrimination in hiring.  Obama promised in 2009 to work to strengthen the Age Discrimination in Employment Act of 1964. Not only didn’t he do that but he signed an executive order in 2010 that permits federal agencies to bypass older workers and hire recent graduates.  Moreover, Labor Secretary Thomas E. Perez supported a private initiative last year by America’s largest corporations to provide jobs to 100,000 inner city “youth” aged 16 to 24, despite the fact that using age as a factor in hiring violates the plain language of the ADEA.  Until Obama was elected,  federal policy supported  job training programs and internships to bolster employment for youth and minorities.

It was Obama’s last State of the Union address. He can take credit for many accomplishments in office but he didn’t do a dang thing for older Americans, many of whom lost jobs, investments and homes in the 2008 recession and have struggled for years with chronic unemployment due to epidemic age discrimination in hiring. The Economic Policy Institute reported in 2013 that about half of Americans aged 65 and older are either in poverty or at risk of poverty.The highest rates of poverty among older Americans are suffered by women  and minorities.

NPR’s Diversity Problem: Why So Few Women Sources?

The high-tech industry in Silicon Valley isn’t the only American industry with serious diversity problems.

National Public Radio this week reported that male sources outnumber female sources on the network’s two largest weekday newsmagazines by two-to-one.  Sources include on-air personalities and  subject matter experts, Only about 30 percent of all  sources on Morning Edition and All Things Considered were female in the fiscal year ending Sept. 30, 2015. There has been no improvement for the past three years.

Women, who comprise 50.45 percent of the U.S. population, are under-represented along all racial classes.

NPRDiversity

Here are the percentage  of male/female sources broken down by race:

  • Asian : Males, 76%; Females 24%.
  • Whites: Males, 70%; Females 30%.
  • Latino: Males, 71%; Females 29%.
  • Blacks: Males 62%; Females 39%.

Women and Latinos are severely under-represented as NPR sources.

The percentage of NPR sources who are Latino remained flat at six percent for each of the three years. The U.S. Census Bureau reports that Latinos make up 17.4 percent of the U.S. population.

Here is the breakdown of sources by race from the NPR report:

  • There was a decline in the overall percentage of white sources, from 80 percent in 2013 to 73 percent in 2015.   Whites make up 77.4 percent of the U.S. population in 2014.
  • African-American voices rose from 5 percent in 2013 to 11 percent in 2015. African-Americans comprise 13.2 percent of the U.S. population.
  • The share of Asian sources rose to eight percent in 2015, compared to five percent in 2013.  Asians comprise 5.4 percent of the U.S. population.

Asians as a group are actually over-represented but Asian women lag the farthest behind in any racial group.

Of course, the U.S. population is not the same as NPR’s listener-ship. NPR listeners are 85 percent white, eight percent Latino and seven percent black.

Keith Woods, NPR’s vice president for diversity in news and operations, is quoted as stating he is “generally pleased with the direction that this is going,” noting the increases in the share of black on-air sources, as well as the percentage of “subject matter experts” who are people of color. He said he had “hoped for better news on our coverage of women, on our inclusion of women.”

Note: Two protected classes were not surveyed by NPR, age and disability.