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May 18, 2015

Former local J.P. Morgan exec suing company for retaliation, wrongful termination

Lawsuit regards request to use nonprofit director position to delay settlement in housing development case

A former JPMorgan Chase & Co. executive from the company's local branch is suing his former employer for retaliation and wrongful termination, The Philadelphia Business Journal reports.

Wayne Trotman, who was JPMorgan Chase's Philadelphia-based mid-Atlantic market president, claims that the company ousted him in 2014 after he refused to use his position as director of Philadelphia nonprofit The Reinvestment Fund (TRF) to delay a settlement in a high-profile housing development case in South Jersey.

Trotman's cites Mount Holly v. Mt. Holly Garden Citizens in Action, Inc., to support his claim. That case was the result of Mount Holly Township's 2008 redevelopment plan for Mount Holly Gardens, a predominantly black and Hispanic neighborhood with household incomes statistically below the area's median income and high crime rates, according to Cornell Law

The township's plan offered to buy residents' homes in the Gardens for prices that were around $40,000, yet planned to build homes that sold for $200,000 and higher. Those houses would then be unaffordable to the neighborhood's current residents.

This prompted the activist group Citizens in Action to sue the Township, citing the disparate impact provision of the Fair Housing Act. That provision was at the heart of the case, which reached the U.S. Supreme Court. Per Cornell Law:

That section makes it unlawful “to refuse to sell or rent after the making of a bona fide offer, or to refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny, a dwelling to any person because of race, color, religion, sex, familial status, or national origin.” The Township of Mount Holly argued that the plain language of the statute does not permit disparate treatment claims, whereas residents of Mount Holly Gardens argued the opposite.

The Obama Administration has used the legal theory based on that section of the law which doesn't require discriminatory intent to cause banks to fork over $480 million in settlements concerning housing and auto loans since 2011, Bloomberg Business reports.

Trotman's nonprofit, TRF, was brokering a settlement between the two parties. However, in his complaint, Trotman claims JPMorgan executives asked him to delay the settlement in an effort to pressure the Supreme Court into making a landmark decision regarding the disparate impact theory that has led to a number of large bank settlements.

The request, according to the lawsuit, came originally from former Minnesota Governor Tim Pawlenty to JPMorgan Chase Chief Executive Jamie Dimon and several other major bank executives. Those executives were betting on a ruling that did require discriminatory intent for such practices, a landmark ruling that would have changed the outcome of similar cases in the future.

Trotman said he refused to use his position with the nonprofit to further the interest of his employer, as it would undermine his responsibility to the TFR. This led to the backlash from JPMorgan, resulting in the company withholding his earned bonuses, giving him poor performance reviews, and eventually his termination, Trotman claims. 

Trotman is claiming wrongful termination in his complaint, saying he was defamed. A spokesman for JPMorgan called Trotman's claims "baseless," according to Bloomberg and The Philadelphia Business Journal.