Former San Antonio branch manager for Wells Fargo sues bank over illegal sales practices

A former manager of a local Wells Fargo Bank branch accused the lender of forcing her out after she refused to go along with the illegal sales practices that cost the bank $185 million in regulatory fines last year, according to a new lawsuit.

Rachael DeBoy of Cibolo seeks as much as $1 million in damages from the San Francisco-based institution, saying she resigned in 2013 to avoid termination because of her inability to reach the bank’s “fraudulent sales goals.”

DeBoy said she refused to go along with “unethical company practices” reinforced by a manager who was filling in for her while she was on maternity leave.

DeBoy, 35, is at least the second former manager of a local Wells Fargo branch to sue over the scandal that upended the institution, sparked consumer lawsuits and triggered investigations by the Consumer Financial Protection Bureau, Justice Department, and Securities and Exchange Commission, among others.

In December, Alex Leal sued the bank, alleging he was discriminated against and ultimately terminated in 2015 for resisting the bank’s “unethical and illegal sales practices” while working at a West Side branch. Wells Fargo countered in a January court filing that it had “legitimate, non-discriminatory, and non-pretextual reason for the employment action it took” against Leal.

San Antonio lawyer Richard Espey filed DeBoy’s suit Friday in Bexar County district court. He said since DeBoy was “essentially run out of Wells Fargo, she has not been able to get another job in the financial industry.”

“When you get fired or forced out by one financial institution, you have a big black mark on you,” Espey said.

Wells Fargo spokesman Michael King said in an email he could not comment on ongoing litigation, but added “we take allegations like these seriously and the company has measures in place to protect team members from retaliation if they report a concern.”

Wells Fargo has been reeling ever since the scandal erupted in September. About 2 million or so fake bank and credit cards accounts were opened by Wells Fargo employees without customer authorization, all part of an effort to achieve lofty sales goals. The practice dates back to at least 2002, according to an April report prepared by the bank’s independent directors.

The bank was fined $185 million by the Consumer Financial Protection Bureau, among others, in September. Earlier this year, the bank agreed to pay $142 million to settle one class-action lawsuit in California, though at least 10 other class-action cases are pending.

Wells Fargo CEO John Stumpf was forced out without severance pay in October. Its board clawed back about $69 million in compensation from Stumpf and $67 million from former Community Bank head Carrie Tolstedt, the bank disclosed in a May filing with the SEC.

The bank is the process of closing about 480 branches nationwide, part of $2 billion in cost-cutting initiatives, the Los Angeles Times reported in May. Last month, Wells Fargo closed its Olmos Park branch at 4014 McCullough Ave.

On Tuesday, the Wall Street Journal reported that Wells Fargo plans on implementing changes at its branches to improve customer and employee relationships. Those changes include efforts to reduce wait times and educate consumers about new digital capabilities.

In her lawsuit, DeBoy said she started at Wells Fargo as a personal banker in 2004 and rose to branch manager in 2008. In 2011, her superiors “began to employ more and more stringent sales quotas for the branches in San Antonio.”

The new sales targets “were based on fraudulent sales figures throughout the company,” the suit said.

DeBoy said she reported unethical behavior at her branch when she returned from maternity leave and was given a negative performance review as a result. Her temporary replacement, on the other hand, received a raise and a promotion, the suit added.

DeBoy reported her concerns to multiple levels within humans resources and to the bank’s “ethics line,” the lawsuit said. She was told she was in jeopardy of being fired for failing to meet the “fraudulent sales goals,” the suit alleged. Ultimately, she was forced to resign to avoid termination, the suit added. She has sued the bank for fraud, breach of contract and wrongful termination.

Espey said DeBoy’s lawsuit is the first he has filed on behalf of a former bank employee, but he anticipates filing more.