California appeals court rules alleged harasser was coworker, not supervisor, in Wells Fargo suit

The Second District Court of Appeal affirmed summary judgment for Wells Fargo on Oct. 5 in a harassment suit by a private-bank wealth advisor. The court held that an investment strategist who supervised other employees but not the plaintiff was a coworker under California's Fair Employment and Housing Act.

The advisor sued in February 2023, alleging that the strategist sexually harassed and assaulted her during a January 2020 business trip to Bakersfield. According to the court's account of the record, she said she blacked out at a group dinner and later recalled him barging into her hotel room; she asserted she was too intoxicated to consent, possibly because she had been drugged. The strategist maintained the encounter was consensual and that she invited him.

Under FEHA, an employer is strictly liable for harassment by the plaintiff's supervisor but only negligent for a coworker's conduct—liable if it knew or should have known and failed to act. The advisor conceded the strategist was not her supervisor but argued strict liability should reach any employee who supervises anyone. The court rejected that reading, treating the two as coworkers because the strategist did not supervise her.

The strategist's title and production rank did not change the analysis. Wells Fargo never designated him a supervisor; he had no authority to hire, fire, approve expenses or approve time off, and he and his support staff reported to the same manager. He ranked in the top three in sales among more than 200 investment strategists nationally and held the title of senior vice president, later managing director.

The court also recounted how the bank responded after the advisor reported the alleged assault to its ethics hotline in November 2020. Wells Fargo flagged the case for expedited investigation within eight days, placed the strategist on paid leave and assigned an internal investigator whose 28-page report, completed over 10 months, concluded the allegations were "unsubstantiated." The bank then issued the strategist a final notice warning that future policy violations could lead to immediate termination.

The advisor's negligence and ratification theories did not survive appeal; the court found she forfeited both. The decision is certified for publication, which means it can be cited in later California cases involving the supervisor definition.