By: Ty Hyderally, Esq., Francine Foner, Esq

Larisa Perry (“Perry”) worked for Wells Fargo Bank, N.A. from 1992 until her termination in March 2019. In January 2015, Perry was promoted to Lead Region President (“LRP”), and transferred from Orlando, Florida to New Jersey. As LRP, Perry managed approximately 7,600 employees. Perry was supervised by Michelle Lee (“Lee”). Following Perry’s whistleblowing activities about Wells Fargo employees engaging in unlawful practices, Perry was subjected to investigations, given the first formal discipline in her otherwise unblemished 26-year career at Wells Fargo, and ultimately terminated on March 8, 2019.

Perry sued Wells Fargo and Lee (“Defendants”) in the Superior Court of New Jersey, Law Division, Monmouth County, alleging that she was the subject of two pretextual investigations and ultimately fired in retaliation for her testimony against Wells Fargo before the Office of the Comptroller of the Currency (“OCC”), in violation of the New Jersey’s Conscientious Employee Protection Act (“CEPA”), N.J.S.A. § 34:19-1, et seq.  Perry v. Lee, 2023 U.S. Dist. LEXIS 180585 (D.N.J. October 5, 2023).  Defendants then removed the case to the New Jersey District Court on the basis of diversity jurisdiction (i.e., the action is between citizens of different States, and the amount in controversy exceeds $75,000, exclusive of interest and costs. 28 U.S.C. § 1332(a)).

Perry alleged that she repeatedly disciplined a Wells Fargo employee, identified in the case as BRD, who carried out unlawful sales practices, such as the unauthorized opening and use of consumer accounts which artificially boosted Wells Fargo’s financial performance, and ultimately resulted in increased compensation and promotions for BRD.”  Id. at *3.  However, Perry asserted that Lee prevented Perry from terminating BRD, and that Lee had permitted BRD to engage in such unlawful practices for seven years when Lee supervised BRD, without consequence. In addition, in January 2018, Wells Fargo advised Perry that she would be subpoenaed by the OCC to testify in connection with the OCC’s investigation of Wells Fargo’s unlawful and fraudulent banking practices. Wells Fargo then initiated internal investigations into alleged misconduct by Perry, which Perry asserted were designed only to provide a pretext upon which to ultimately terminate her.  In fact, “[t]he target resolution date of the Initial Investigation was February 19, 2018—around the same time as when Perry was to testify before the OCC.”  Id. at *5-6. Wells Fargo continued to take adverse employment actions against Perry, including Lee giving Perry her first formal discipline in her 26 years working for Wells Fargo on March 15, 2018. Perry then testified against Wells Fargo in April 2018. Three months later, in September 2018, Wells Fargo launched another investigation of Perry alleging various acts of misconduct and ultimately terminated her on March 8, 2019, for allegedly violating Wells Fargo company policies.

Defendants moved for summary judgment, arguing that: “(1) Perry cannot establish a causal connection between her testimony before the OCC and any alleged adverse employment action taken against her, and therefore, cannot meet the requirements for a prima facie CEPA claim; (2) Defendants had a ‘legitimate, nondiscriminatory reason for taking the employment action.’” (N.J.S.A § 34:19-3(c)); and (3) Perry cannot establish that Defendants’ legitimate rationale for dismissal was pretextual.” Id. at *1-2.  The New Jersey District Court disagreed, finding that on all issues, there were material factual disputes that a jury needed to determine. As the District Court explained: “To prevail on a CEPA retaliation claim, a plaintiff must prove that “‘(1) he or she reasonably believed that his or her employer’s conduct was violating either a law, rule, or regulation promulgated pursuant to law, or a clear mandate of public policy; (2) he or she performed a ‘whistle-blowing’ activity . . . ; (3) an adverse employment action was taken against him or her; and (4) a causal connection exists between the whistle-blowing activity and the adverse employment action.’”  Id. at *13 (citations omitted).  The New Jersey District Court held that there were material factual disputes on two of those elements: (1) whether Perry has established causation; and (2) whether Defendants have presented legitimate reasons supporting termination of Perry which are not pretext for retaliation.  Id. at *14.

The New Jersey District Court found that a jury could find that the temporal proximity of the investigations of Perry by Wells Fargo to Perry’s negative OCC testimony, and the initial investigation of Perry to the notice of OCC’s intent to subpoena Perry’s testimony, were suggestive of causation. Other pertinent facts a jury could consider supportive of causation were that “the Initial investigation lasted through Perry’s testimony in April 2018” and “the target resolution date of the Initial investigation was February 19, 2018—around the same date Perry was originally scheduled to testify in front of the OCC.”  Id.  The New Jersey District Court also pointed to the fact that the second investigation of Perry was five months after Perry’s testimony and four months after Pery disclosed the details of her OCC testimony to Wells Fargo.  With regard to the legitimate reason asserted by Defendants for Perry’s termination, the New Jersey District Court opined that “the jury could determine otherwise based upon the credibility of the witnesses.” Id. at *15.

Finally, the New Jersey District Court also rejected the Defendants’ attempt to dismiss Perry’s claims for punitive damages and damages for unvested shares and relocation expenses. Regarding damages for unvested shares, the New Jersey District Court held that “If the jury finds that the termination was the result of Perry’s whistleblower activities, the value of the unvested shares is a foreseeable element of damages upon which Plaintiff may recover.” Id. at *16.  Perry also sought “’relocation damages” for the loss in value of her home that she was forced to sell at a substantial loss.  The New Jersey District Court reserved on that issue until it heard testimony, observing that “all remedies available in common-law tort actions are available to a party who prevails under the CEPA’” Id. at *16-17, citing Harrington v. Lauer, 888 F. Supp 616, 621 (D.N.J. 1995) (citing N.J.S.A. 34:19-5)). In addition, the New Jersey District Court refused to dismiss Plaintiff’s claim for punitive damages, acknowledging that there were disputed factual issues and observing that “[g]enerally, the ‘issue of punitive damages is a fact question which should be decided by a jury.’” Id. at *18 citing Domm v. Jersey Printing Co., 871 F. Supp. 732, 739 (D.N.J. 1994).

This opinion reaffirms that under CEPA New Jersey employees who suffer retaliation for engaging in protected whistleblowing activities are entitled to a jury trial and to all of CEPA’s available remedies.

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