The National Bank Act (NBA) grants banks the power to dismiss their officers “at pleasure.” Courts have interpreted this to mean that the NBA protects banks from wrongful termination claims by officers, including employment discrimination suits. A new decision, however, makes it clear that job duties—not job title—are the determining factor in whether an employee is an officer for purposes of this law.
VP in Title Only
Padmanabhan Ramanathan worked for Bank of America as a computer programming consultant. He didn’t supervise other employees and had no responsibility for hiring, firing, or conducting performance reviews. He didn’t enter contracts on the bank’s behalf, and he had no access to financial information pertaining to the bank’s relationship with customers. Further, Ramanathan neither interacted with customers nor was involved with the bank’s day-to-day operations in serving them.
At one point, Ramanathan discovered that he held the job title of “vice president.” When he asked senior vice president Allen Pampe about it, Pampe reportedly told him that the title was “insignificant” and really just a corporate—as opposed to functional—job title, which had no effect on Ramanathan’s wages, duties, or responsibilities.
Bank Asserts Power to Terminate
Eventually, Ramanathan was fired for alleged performance issues, and he sued the bank for discrimination and retaliation based on race, national origin, and religion. Bank of America contended that the NBA law allowed it to terminate officers like Ramanathan free from the threat of legal action. The trial court agreed with the bank and dismissed the lawsuit.
Job Duties Are Key
Now, a California appeals court has reinstated Ramanathan’s case.1 The key issue was whether Ramanathan qualified as an officer for NBA purposes because of his vice president job title. If he was not an officer, he was free to sue for employment discrimination; if he was an officer, the NBA would preclude him from suing.
The court ruled that when an employee asserts that his or her vice president position isn’t vested with any of the duties or responsibilities normally associated with such a position, the bank must show that the employee actually is an officer. The relevant criteria the bank must demonstrate are: 1) the employee holds an office created by the board of directors and listed in the bank’s bylaws; 2) the board of directors appoints the employee; 3) the employee has legal authority to bind the bank in transactions; and 4) the employee’s decision-making authority relates to fundamental banking operations that could affect the public’s trust in the bank.
While Ramanathan conceded that his position met the first two criteria, evidence demonstrated that he couldn’t legally bind the bank in transactions, and he didn’t have decision-making authority relating to banking operations. Thus, despite the vice president title, Ramanathan didn’t qualify as an officer and could pursue his lawsuit.
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Impact of Case
This case is a reminder that an employee’s job title often has little or no bearing on his or her workplace legal protections and rights. This is true under the NBA, as demonstrated in the court’s decision, as well as other laws such as those regulating overtime exemption and coverage under federal labor relations laws.
1Ramanathan v. Bank of America, Calif. Court of Appeals (Dist. 1) No. A113611, 2007