Utah's University First FCU Prevails in Retaliation Case at U.S. Labor Dept.

A U.S. Labor Department appeals board has ruled for University First Federal Credit Union in a retaliation case brought by a former employee who raised questions about loan closing procedures.

The Labor Department’s administrative review board said the former employee had not engaged in activity protected under the Consumer Financial Protection Act of 2010 during his employment at the credit union. The board upheld a decision by a federal administrative law judge.

The former employee had served as a financial service representative since 2015 at University First’s branch in Sandy, Utah, and duties included the sale of loans for real estate, auto and personal. The employee, the appeals board said, “expressed dissatisfaction with some of University First’s internal procedures, and he considered them inadequate compared to his previous employer.”

An auditor for the Salt Lake City-based University First ($1.2 billion in assets, 101,240 members) spoke with the employee in 2015 about his concerns. The court said the employee “suggested ways to improve customer service, expressed concerns about UFFCU’s alarm system, and offered to help create an online procedural manual for employees.”

In one instance recounted in the labor board ruling, the employee raised questions about an auto loan he worked on but for which he was not given credit. The loan closed at a different University First branch. The employee told University First’s branch manager that it was not “legally and ethically right for someone to steal someone’s work.” The labor board said the employee then said he could not work at the credit union “due to a number of issues.”

The employee subsequently said he would like to continue working at University First. But the credit union’s human resource manager stated, according to the labor board: “We do not feel that having an employee in a sensitive member position, who does not have the desire to be with us, is in the best interest of all parties. Subsequently you can resign or we will have to terminate employment with you.”

The administrative law judge noted in his 2018 decision that the employee “performed his sales job well, and no credit union members complained about him.”

The judge also concluded that the employee’s resignation letter “only complained about internal policies, not violations of Dodd-Frank.”

The lawyer for the employee argued to the labor appeals board that complaints about “the lack of written or standardized or internal policies and procedures could lead to mistakes and violations of Dodd-Frank” and as such they “should be entitled to protection.”

But the labor panel concluded otherwise. The board judges said there was no evidence in the case that the former employee had engaged in activity protected by the Consumer Financial Protection Act.

“[A]n employee does not engage in whistleblower activity by describing merely theoretical situations,” the appeals board said in its ruling. “Such a belief is too attenuated from the standard to be a reasonable belief of a violation of law and therefore failed to satisfy one of the required elements of his retaliation claim.”