Financial Industry News
California Labor Law Breach of Contract: "I'm Not the Only One"
"I was the chief lending officer at a nationally chartered commercial bank," says Paul. "Part of my compensation included bonuses and a non-funded profit sharing account. I worked at this bank for just over nine years and received all my bonuses but nothing from the profit-sharing account."
Paul's employment contract states that this account (he is owed over $1 million) would be paid no later than 60 days after his termination date. "My immediate supervisor assured me at the time of my resignation that the owner of the bank said I had nothing to worry about, relative to payment of the profit-sharing account," says Paul. "Then my boss gave me a letter indicating they couldn't pay me (which was not true??"they did have the cash resources at that time) and that I would be paid when they raised additional capital."
Paul didn't take action right away, assuming correctly that it would set the alarm button and negatively impact the bank's capital raising. "The bank was ultimately not successful and was taken over by the FDIC in October 2009--at that point I sought legal counsel."
Paul says he resigned because he couldn't assess the likelihood of the bank's survival??"it had invested heavily in Fannie Mae and Freddie Mac. "If the bank wasn't going to survive, I would wind up with nothing, not even my bonuses; however, my resignation letter made it clear that I was grateful for the time there and for the opportunity and it was one of the most difficult decisions I ever had to make. And I know many others made this same decision…
"But the bank wasn't happy with my resignation, which I learned after I left. Within 30 days of my departure, a co-worker told me, 'when word gets out as to why Paul left, he will likely have great difficulty obtaining a job in this industry again.' My boss was pissed off because I built this franchise from scratch and if I am leaving, there must be real problems here. Not only did it make him look bad, he was one of the principals responsible for the investment that took the bank down."
(Paul's former employer may be in violation of another California labor law: California Labor Code Section 970 refers to misrepresentations by an employer to prevent a former employee from obtaining new employment.)
"My attorney is sure that I will be granted the award in arbitration and it will be affirmed as a judgment," says Paul. "There is no way of determining whether I will actually receive payment. The bank's holding company is not bankrupt but they have larger obligations so I have to get to the back of the line.
"My job prospects don't look good: the banking industry in the US is dismal, as everyone knows. I still believe I did the right thing by resigning but I also believe my decision alternatives were taken away from me. Any sensible, thoughtful person would do the same thing. From the owner's perspective I am in the wrong, but the owner put me in this position. I could have stayed and lost everything??"instead I made the decision to preserve what I built in nine plus years.
"I believe that the California labor board can take action against the company. My attorney and I have filed a complaint with the board. It has only been 30 days, so I am hopeful that they take action and some portion of the monies due to me will take priority over their other clients."
California Labor Law: Hostile Environment
Gwen (not her real name pending a potential lawsuit) is 64 years old and quite a stockbroker celebrity in Southern California??"she was an exceptional stockbroker. She has also put up with "a lot of BS" and withstood the heat of the brokerage business. "The reason I survived is that in dealing with the male psyche of this profession, it has pushed me to be smarter, brighter and better than most of the men I have dealt with," says Gwen. But the corporation got the better of her.
"I was employed at Wachovia as a senior VP and investment officer," says Gwen. "Like many firms, it pays politically correct lip service on its website, HR publications and training programs to encourage and support women and minorities but in reality it is all propaganda to cover their butts. They really don't support women in the business, in fact they discourage them. But I was hired because I had a good book of clients and the guy who hired me respected and admired women (they fired him a few years later).
I was doing well but the market crashed in 2000--2001 and along with that, my husband was diagnosed with Alzheimer's. Then my parents became ill. For the last seven or eight years, I was the primary caregiver and sole financial support of them and my brother. A lot of pressure was on me. My energy level and ability to do high-key investment seminars for women (my main job) diminished and consequently, over a five-year period, with a combination of market conditions and demands on me, my business did not grow. However, I kept the firm informed at all times.
But Wachovia made it difficult for me to continue my work. They took away my private office and put me in the bull pen with the trainees. In December of 2007 the branch manager gave me a probationary letter which I was forced to sign??"if I didn't sign, I would have been fired on the spot.
The letter said that, 'Over the next three months, you must bring in half a million dollars a month in new assets or you will be terminated.' Nobody else was given that letter and it was impossible to achieve in this kind of market. The other brokers in the office were glad just to keep their existing clients. In other words, it was a procedure to protect themselves from my wrongful dismissal.
(By the way, some brokers were making more than me at this time when I was down, but others were making less. And all those brokers had partners to help them??"I had a family to support.)
They kept on raising the bar: I am a year away from retirement and they pulled this on me. I walked away with no medical insurance; no life insurance that I paid into for 10 years on my husband. I would have been eligible for social security benefits but now I have to wait more than a year and I'm not even eligible for health benefits yet.
If they hadn't pressured me, I would have been better able to do my job. That letter made me physically ill; it was like a 90-day freight train bearing down on me. How could I perform in an environment like that? It gave me insomnia and my doctor had to prescribe meds to stop my stomach spasms from so much stress. I filed workers' compensation the day I left and that is still ongoing. They are fighting me on it, but my attorney is optimistic and we are going to court in a month."
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