Wells Fargo Can Reinstate Worker Fired Over Theft of 10 Cents

A Des Moines man who lost his job at the West Des Moines-based Wells Fargo & Co. for putting a cardboard dime in a washing machine in 1963 can return to work in the banking industry.

Richard Eggers, a Vietnam veteran whose boredom a half-century ago got him fired this summer by Wells Fargo Home Mortgage, became a national example of federal rules that go too far as his case gained media exposure and questions from Iowa Congressmen.

Eggers lost his job in July after Wells Fargo carried Federal Deposit Insurance Corporation regulations enacted after the mortgage lending crisis to an “insane conclusion,” said Leonard Bates, a Des Moines attorney representing Eggers.

A background check showed that in 1963 Eggers spend two days in jail for putting a cardboard cutout of a dime in a washing machine while waiting for a friend. He has had no other encounters with the law in the decades since.

“I’m pleased that the waiver was approved (by the FDIC),” Eggers told the Des Moines Register Wednesday.

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His attorney, Bates, thinks state and federal civil rights complaints he filed with the Iowa Civil Rights Commision and the U.S. Equal Employment Opportunity Commission, may help his client accomplish win back his job and more. 

If the complaints are determined to have merit by the state and federal commissions, a class action lawsuit could be filed on behalf of thousands of low-level workers like Eggers, a customer service representative for the past seven years.

“This complaint is intended to place Wells Fargo, First Advantage, and the FDIC on notice of class-wide intentional and unintentional forms of systemic discrimination affecting protected classes of applicants and employees who are adversely affected by the above-mentioned background check policy,” the document filed with the Iowa Civil Rights Commission said.

Bates said he believes thousands of Wells Fargo employees were caught up in the same net as low-level employees like Eggers. 

Iowa Workforce Development spokeswoman Kerry Koonce said information about unemployment claims against employers are protected under federal law, but become public when appeals are filed.

Town Constable “Quite Delighted to Find a Criminal”

Eggers says he’s trying to keep a sense of humor about his situation.

In 1963, he was convicted of “operating a coin-charging machine by false means” after the Carlisle, Iowa, town constable arrested him inserting a cardboard cutout of a dime in a washing machine at a laundromat. Eggers, who was 18 at the time, said he was bored as he waited for a friend to finish doing laundry, and he “wasn’t trying to rip them out of a wash.”

“In that little town of 1,200, they didn’t have enough crime to keep the sheriff occupied, and he was quite delighted to find a criminal,” said Eggers, who said he would be “kind of amused by it” if it weren’t happening to him.

“In case you’re wondering,” he quipped, the cardboard dime “doesn’t work.”

Eggers pleaded guilty to the misdemeanor crime, served two days in jail and then went off college. He ran out of money, though, and joined the U.S. Army, fighting in the Vietnam War. He used the GI Bill to finish his education at Drake University, then went to work, assuming the “stupid mistake” was in the past, an irrelevant frivolity of youth – until last May, that is.

Attorney: Employer Could Have Exercised Discretion

That’s when he learned the conviction had been flagged in a background check. Eggers, who had been working for Wells Fargo Home Mortgage for seven years, and other employees had been told in January they’d need to pass the background check in order for the company to remain in compliance with federal law.

The SAFE Act, as the U.S. Secure and Fair Enforcement for Mortgage Licensing Act of 2008 is commonly known, is aimed at boosting public confidence in the nation’s banking system and minimize banks’ risks by weeding out employees who have been convicted of crimes of dishonesty or breach of trust.

Eggers said he assumed when he learned of the background checks that he would come back “squeaky clean.” And when he wasn’t immediately dismissed in May, he assumed that Wells Fargo had decided the infraction was so minor as to not be taken seriously. 

Wells Fargo could have taken that position, Bates said.

“Doesn’t every crime involve some kind of breach of trust or dishonesty?” an incredulous Bates asks. “The intent is to try to weed out fraudulent activity – money laundering and stealing from banks and that kind of thing.”

Wells Fargo has said it faces fines of up $1 million a day if it keeps employees like Eggers on the payroll.

Key words in that statement, Bates said, are “up to.” He doubts the FDIC would even care. “You’re telling me the FDIC is going to go out of its way on something this petty?”

Bates said FDIC-insured companies are not required by new regulations to fire every employee convicted of a minor infraction, as Eggers was. 

The attorney also alleges Wells Fargo erred in failing to tell Eggers and other employees in January why the background checks were being ordered and of their legal recourse to file for a waiver. Without that explanation of their right to file for waivers, employees are effectively “stuck” because the regulation is so complex and spread throughout the banking law that a lay person would have a hard time unraveling it to fully understand the implications.

The costs of applying for such waivers could have even been shifted to the employee, eliminating any argument that the process would have been financially burdensome for Wells Fargo.

Jail Sentences More Common in 1963

Wells Fargo Home Mortgage, the background-ground check company First Advantage, the FDIC and the Federal Reserve’s board of directors are named in the complaints.

Bates said the law is vague, but the “majority of the blame goes to Wells Fargo for taking this statute to an insane conclusion.”

“That’s not to say the law is not to blame, too,” he said. “It infringes on employees’ due process rights to continued employment without arbitrary government interference.”

Although older workers like Eggers, who is 68, were not specifically targeted in the mass dismissals, they were disproportionately affected because jail sentences were more common in 1963, he said.

The action also disproportionately affects African-Americans and Hispanics, “furthering the effects of past racism by placing arbitrary barriers on how they can obtain a waiver,” Bates said. In the current case, the barrier would have vanished, he said, had Wells Fargo not purposely kept employees like Eggers “in the dark” about their rights to a waiver.

In some case, waivers are automatic, but not in Eggers’ case. He was actually sentenced to 15 days in jail, but he was released from custody after two days so he could enroll in college.

“If you were sentenced to 365 days or less, [companies covered under the FDIC regulations] don’t care and you don’t need a waiver,” Bates said. “But if you served a second in jail, you have to go through the application process.”