Federal Court Affirms Merrill Lynch Victory in Nigerian Discrimination Case

Ultimately, the Investigations Group discovered that Uwasomba had been convicted of petit larceny in the Chesterfield Circuit Court in Virginia in February 2008 and received a sentence of 12 months and 4 days in jail, with 12 months suspended. (Linville Dec. ¶ 5.) Based on this discovery, Uwasomba's background check was deemed unsatisfactory. (Id.) On December 7, 2016, the Investigations Group sent Uwasomba a letter informing her of the results of her background check. (12/07/2016 Letter, ECF No. 7.) 

Merrill Lynch provided Uwasomba with an opportunity to contest the background check determination. The December 7, 2016 letter informed Uwasomba that she could submit additional information within seven days to clarify or correct the results of the investigation. (Id.) Uwasomba's case was subsequently assigned to Appeals Manager Angela Linville. (Linville Decl. ¶ 9.) Linville contacted Uwasomba and informed her that FINRA rules precluded her from working as a Preferred Transition Specialist Trainee. (Id. ¶ 10.) Linville further explained that Uwasomba would be disqualified from any position at Merrill Lynch unless she could demonstrate that she met the de minimis exception under the FDIA; in other words, that she spent three days or fewer in jail. (Id. ¶ 11.) In an effort to prove that she had served fewer than four days in jail, Uwasomba visited the Chesterfield Circuit Court in Virginia to obtain records related to her incarceration. (Pl.'s Dep. 188:4-12.) The Court records indicated exactly what the background investigation had uncovered: that Uwasomba had served four days in prison for petit larceny. (Id. 188:19-189:17.) Uwasomba ultimately did not submit to Merrill Lynch or Linville any documents relevant to her conviction and sentence. (Pl.'s Dep. 189:2-9.)

SIDE BAR: Below, I have cited an extensive portion of a Federal Deposit Inssurance Corporation (the "FDIC") "Statement of Policy," which details the impact of prior criminal offenses upon a candidate's application for employment at a covered institution. Frankly, the factors noted provide a detailed pathway through the background verification process and often come as a surprise to those unfamiliar with the rigors of the required inquiry. As set forth in pertinent part under the FDIC's "5000 -- Statements of Policy / for Section 19 of the Federal Deposit Insurance Act" ( the "FDIA"):

Section 19 of the Federal Deposit Insurance Act (12 U.S.C. 1829) prohibits, without the prior written consent of the Federal Deposit Insurance Corporation (FDIC), a person convicted of any criminal offense involving dishonesty or breach of trust or money laundering (covered offenses), or who has agreed to enter into a pretrial diversion or similar program (program entry) in connection with a prosecution for such offense, from becoming or continuing as an institution-affiliated party, owning or controlling, directly or indirectly an insured depository institution insured institution), or otherwise participating, directly or indirectly, in the conduct of the affairs of the insured institution. In addition, the law forbids an insured institution from permitting such a person to engage in any conduct or to continue any relationship prohibited by Section 19. It imposes a ten-year ban against the FDIC's consent for persons convicted of certain crimes enumerated in Title 18 of the United States Code, absent a motion by the FDIC and court approval. Section 19 imposes a duty upon an insured institution to make a reasonable inquiry regarding an applicant's history, which consists of taking steps appropriate under the circumstances, consistent with applicable law, to avoid hiring or permitting participation in its affairs by a person who has a conviction or program entry for a covered offense. The FDIC believes that at a minimum, each insured institution should establish a screening process that provides the insured institution with information concerning any convictions or program entry pertaining to a job applicant. This would include, for example, the completion of a written employment application that requires a listing of all convictions and program entries. In the alternative, for the purposes of Section 19, an FDIC supervised institution may extend a conditional offer of employment contingent on the completion of a background check satisfactory to the institution and to determine if the applicant is barred by Section 19. In such a case, the job applicant may not work for or be employed by the insured institution until such time that the applicant is determined to not be barred under Section 19. The FDIC will look to the circumstances of each situation for FDIC-supervised institutions to determine whether the inquiry is reasonable. Section 19 applies, by operation of law, as a statutory bar to participation absent the written consent of the FDIC. Upon notice of a conviction or program entry, an application must be filed seeking the FDIC's consent prior to the person's participation. The purpose of an application is to provide the applicant an opportunity to demonstrate that, notwithstanding the bar, a person is fit to participate in the conduct of the affairs of an insured institution without posing a risk to its safety and soundness or impairing public confidence in that institution. The burden is upon the applicant to establish that the application warrants approval.

. . .

B. Standards for Determining Whether an Application Is Required

Except as indicated in paragraph (5), below, an application must be filed where there is present a conviction by a court of competent jurisdiction for a covered offense by any adult or minor treated as an adult, or where such person has entered a pretrial diversion or similar program regarding that offense. Before an application is considered by the FDIC, all of the sentencing requirements associated with a conviction or conditions imposed by the pretrial diversion, or similar program, including but not limited to, imprisonment, fines, condition of rehabilitation, and probation requirements, must be completed, and the case must be considered final by the procedures of the applicable jurisdiction. The FDIC's application forms as well as additional information concerning Section 19 can be accessed at the FDIC website. The link is: https://www.fdic.gov/regulations/laws/forms/section19.html.

(1)  Convictions

There must be present a conviction of record. Section 19 does not cover arrests, pending cases not brought to trial, acquittals, or any conviction that has been reversed on appeal. A conviction with regard to which an appeal is pending requires an application. A conviction for which a pardon has been granted will require an application. A conviction that has been completely expunged is not considered a conviction of record and will not require an application. If an order of expungement has been issued in regard to a conviction or program entry and is intended by the language in the order itself, or in the legislative provisions under which the order was issued, to be a complete expungement, then the jurisdiction, either in the order or the underlying legislative provisions, cannot allow the conviction or program entry to be used for any subsequent purpose including, but not limited to, an evaluation of a person's fitness or character. The failure to destroy or seal the records will not prevent the expungement from being considered complete for the purposes of Section 19 in such a case. Expungements of pretrial diversion or similar program entries will be treated the same as those for convictions. Convictions that are set aside or reversed after the applicant has completed sentencing will be treated consistent with pretrial diversions or similar programs unless the court records reflect that the underlying conviction was set aside based on a finding on the merits that such conviction was wrongful.

(2)  Pretrial Diversion or Similar Program

Program entry, whether formal or informal, is characterized by a suspension or eventual dismissal of charges or criminal prosecution often upon agreement by the accused to treatment, rehabilitation, restitution, or other noncriminal or non-punitive alternatives. Whether a program constitutes a pretrial diversion or similar program is determined by relevant Federal, state or local law, and, if not so designated under applicable law then the determination of whether it is a pretrial diversion or similar program will be made by the FDIC on a case-by-case basis. Program entries prior to November 29, 1990, are not covered by Section 19.

(3)  Dishonesty or Breach of Trust

The conviction or program entry must be for a criminal offense involving dishonesty, breach of trust or money laundering. "Dishonesty" means directly or indirectly to cheat or defraud; to cheat or defraud for monetary gain or its equivalent; or wrongfully to take property belonging to another in violation of any criminal statute. Dishonesty includes acts involving want of integrity, lack of probity, or a disposition to distort, cheat, or act deceitfully or fraudulently, and may include crimes which Federal, state or local laws define as dishonest. "Breach of trust" means a wrongful act, use, misappropriation or omission with respect to any property or fund that has been committed to a person in a fiduciary or official capacity, or the misuse of one's official or fiduciary position to engage in a wrongful act, use, misappropriation or omission. Whether a crime involves dishonesty or breach of trust will be determined from the statutory elements of the crime itself. All convictions or program entries for offenses concerning the illegal manufacture, sale, distribution of, or trafficking in controlled substances shall require an application unless they fall within the provisions for de minimis offenses set out in (5) below.

(4)  Youthful Offender Adjudgments

An adjudgment by a court against a person as a "youthful offender" under any youth offender law, or any adjudgment as a "juvenile delinquent" by any court having jurisdiction over minors as defined by state law does not require an application. Such adjudications are not considered convictions for criminal offenses. Such adjudications do not constitute a matter covered under Section 19 and is not an offense or program entry for determining the applicability of the de minimis offenses exception to the filing of an application.

(5)  De minimis Offenses

(a)  In General

Approval is automatically granted and an application will not be required where the covered offense is considered de minimis, because it meets all of the following criteria:

• There is only one conviction or program entry of record for a covered offense;

• The offense was punishable by imprisonment for a term of one year or less and/or a fine of $2,500 or less, and the individual served three (3) days or less of jail time. The FDIC considers jail time to include any significant restraint on an individual's freedom of movement which includes, as part of the restriction, confinement to a specific facility or building on a continuous basis where the person may leave temporarily only to perform specific functions or during specified times periods or both. The definition is not intended to include those on probation or parole who may be restricted to a particular jurisdiction, or who must report occasionally to an individual or to a specified location.

• The conviction or program was entered at least five years prior to the date an application would otherwise be required; and

• The offense did not involve an insured depository institution or insured credit union.

(b)  Additional Applications of the De Minimis Offenses Exception to Filing Age at time of covered offense:

• If the actions that resulted in a covered conviction or program entry of record all occur when the individual was 21 years of age or younger, then the subsequent conviction or program entry, that otherwise meets the general de minimis criteria in (a) above, will be considered de minimis if the conviction or program entry was entered at least 30 months prior to the date an application would otherwise be required and all sentencing or program requirements have been met.

Convictions or program entries for insufficient funds checks:

• Convictions or program entries of record based on the writing of "bad" or insufficient funds check(s) shall be considered a de minimis offense under this provision and will not be considered as having involved an insured depository institution if the following applies:
  
  
• There is no other conviction or program entry subject to Section 19, and the aggregate total face value of all "bad" or insufficient funds check(s) cited across all the conviction(s) or program entry(ies) for bad or insufficient funds checks is $1,000 or less; and
  
  
• No insured depository institution or insured credit union was a payee on any of the "bad" or insufficient funds checks that were the basis of the conviction(s) or program entry(ies).

Convictions or program entries for small-dollar, simple theft:

• A conviction or program entry based on a simple theft of goods, services and/or currency (or other monetary instrument) where the aggregate value of the currency, goods and/or services taken was $500 or less at the time of conviction or program entry, where the person has no other conviction or program entry under Section 19, where it has been five years since the conviction or program entry (30 months in the case of a person 21 or younger as described above) and which does not involve an insured financial institution or insured credit union is considered de minimis. Simple theft excludes burglary, forgery, robbery, identity theft, and fraud.
  
  

Convictions or program entries for the use of a fake, false or altered identification card:

• The use of a fake, false or altered identification card used by person under the legal age for the purpose of obtaining or purchasing alcohol, or used for the purpose of entering a premise where alcohol is served but for which age appropriate identification is required, provided that there is no other conviction or program entry for a covered offense, will be considered de minimis.

Any person who meets the criteria under (5) above shall be covered by a fidelity bond to the same extent as others in similar positions, and shall disclose the presence of the conviction or program entry to all insured institutions in the affairs of which he or she intends to participate. Further, no conviction or program entry for a violation of the Title 18 sections set out in 12 U.S.C. 1829(a)(2) can qualify under any of the de minimis exceptions to filing set out in 5 above.

[U]wasomba's case rests entirely on one vague statement about "Nigerians and fraud" which she cannot precisely recollect. Furthermore, the alleged statement was made by an individual who had no authority to hire her. Quite simply, she has failed to present direct evidence of discrimination related to an individual with authority to hire or fire her. Finally, she has not presented any evidence that she is qualified to work in any capacity for Merrill Lynch. Accordingly, Summary Judgment is ENTERED in favor of Merrill Lynch. 

• Merrill Lynch
• Trainee
• Nigeria
• Petit Larceny
• wrongful termination
• Title VII
• FDIA
• FDIC
• BrokeAndBroker
• Bill Singer