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Eggers v. Wells Fargo Bank, N.A.

United States Court of Appeals, Eighth Circuit

August 13, 2018

Charlene Eggers, Estate of Richard Eggers Plaintiff- Appellant
Wells Fargo Bank, N.A. Defendant-Appellee Richard Eggers, individually and on behalf of a putative class of similarly situated individuals, Deceased Plaintiff

          Submitted: October 16, 2017

          Appeal from United States District Court for the Southern District of Iowa - Des Moines

          Before SMITH, Chief Judge, MURPHY and COLLOTON, Circuit Judges.[*]

          SMITH, Chief Judge.

         Richard Eggers ("Richard") sued Wells Fargo Bank, N.A., alleging the bank violated the Age Discrimination in Employment Act (ADEA) in terminating his employment. The district court[1] granted Wells Fargo's motion for summary judgment. We affirm.

         I. Background

         In 2005, Richard, then age 61, applied to work at Wells Fargo. On the job application, Wells Fargo required applicants to answer whether they had ever been convicted of any crime involving dishonesty or breach of trust. He answered "No," and a name-based background check revealed no prior conviction. Wells Fargo subsequently hired Richard for its Home Mortgage division.

         In 2010, Wells Fargo switched to a more sophisticated FBI fingerprint-based background check. The bank then ordered Richard's division to undergo rescreening with the new system. Richard authorized the rescreen, and again he indicated that he had no prior convictions for crimes involving dishonesty or breach of trust. However, the new background check showed that Richard had a fraud conviction under Iowa law in 1963 and served two days in jail.

         Under federal law, Richard's prior conviction bars him from working for Wells Fargo. Referred to as "Section 19," 12 U.S.C. § 1829(a)(1)(A) prohibits, inter alia, "any person who has been convicted of any criminal offense involving dishonesty or a breach of trust" from becoming or continuing as an employee of any institution insured by the Federal Deposit Insurance Corporation (FDIC). The statute provides stiff penalties for employer violators, including daily fines of up to $1, 000, 000 per day and/or five years' imprisonment. Id. § 1829(b). Individuals with prior disqualifying convictions under Section 19 may apply for employment waivers with the FDIC. In addition, banking institutions wishing to hire-or to continue to employ-Section 19-disqualified individuals also may sponsor waiver applications. Disqualified individuals may not begin or continue employment with the FDIC-insured institutions prior to obtaining waivers. Section 19 expressly precludes the FDIC from granting a waiver to individuals disqualified due to certain enumerated offenses for at least ten years. All offenses older than ten years are treated the same as each other. See id. § 1829(a)(2)(A). In other words, Section 19 mandates that a 40-year-old conviction for a crime involving dishonesty or breach of trust disqualifies a person from FDIC-institution employment the same as does an 11-year-old conviction.

         Upon learning of Richard's disqualification under Section 19, Wells Fargo acted to comply with the statute. The bank first offered him leave time to obtain a waiver, but he refused. Wells Fargo then terminated his employment. Richard then applied to the FDIC for a Section 19 waiver, which was granted. Wells Fargo offered to reinstate Richard to his prior position in the Home Mortgage division. He refused the reinstatement offer and opted to sue the bank, alleging employment discrimination in violation of the ADEA. He alleged Wells Fargo violated the ADEA by (1) refusing to sponsor Section 19 waivers and by (2) failing to provide job applicants and employees with pre-screening notice of the opportunity to obtain waivers. Specifically, Richard contended that these two practices created a disparate impact against older workers.

         After two years of litigation, Wells Fargo moved in the district court for summary judgment. By then, Richard had died, and his widow, Charlene Eggers, had been substituted as the party plaintiff. The district court conducted a hearing on the summary judgment motion after briefing by the parties. It then issued a ruling in favor of Wells Fargo. The court, "[n]ow finally fully informed, . . . conclude[d] [that] plaintiff[] ha[s] no viable theories for recovery, nor [has she] disclosed or discovered facts supporting [the] pleaded claims of age . . . discrimination." Eggers v. Wells Fargo Bank, N.A., No. 4:14-cv-00394-CRW-SBJ, slip op. at 3 (S.D. Iowa Oct. 27, 2016), ECF No. 173. The court noted that Eggers "cited [no] legal authorities nor discovered evidence supporting [the] age discrimination claims, whether characterized as intentional discrimination or disparate impact results." Id. at 5. Further, the court observed that "any bank or other financial institution wisely would prefer for its customers to be served by employees who were not pre[v]iously persons convicted of crimes of dishonesty. When [Wells Fargo] learned of the conviction[], its sound business decision was to terminate . . . ." Id. at 4. The district court then granted Wells Fargo's summary judgment motion and dismissed Eggers's lawsuit.

         II. Discussion

         Eggers alleges that the district court, in granting summary judgment to Wells Fargo: (1) ignored Eggers's identified discriminatory employment practices; (2) conflated disparate treatment and disparate impact law in holding that Eggers failed to make out a prima facie case of disparate impact under the ADEA; and (3) incorrectly concluded that Wells Fargo's blanket refusal to sponsor waivers and to provide notice of opportunity for Section 19 waivers was a reasonable factor other than age. We disagree and address each argument in turn.

         We review the district court's grant of summary judgment de novo. Torgerson v. City of Rochester, 643 F.3d 1031, 1042 (8th Cir. 2011) (en banc). "Summary judgment is not designed to weed out dubious claims, but to eliminate those claims with no basis in material fact." Wilson v. Myers, 823 F.2d 253, 256 (8th Cir. 1987) (citation omitted). "Summary judgment is proper 'if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law.'" Torgerson, 643 F.3d at 1042 (quoting Fed.R.Civ.P. 56(c)(2)). "Facts must be viewed in the light most favorable to the nonmoving party only if there is a genuine dispute as to those facts." Id. (quoting Ricci v. DeStefano, 557 U.S. 557, 586 (2009)). "'Mere allegations, unsupported by specific facts or evidence beyond the nonmoving party's own conclusions, are insufficient to withstand a motion for summary judgment.' We may affirm a district court's grant of summary judgment on any basis ...

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