Wrongful Dismissal Case Study: Carmen Segarra vs. the Federal Reserve Bank of New York

According to statistics from the the U.S. Equal Employment Opportunity Commission (EEOC), lawsuits filed for the purpose of seeking wrongful dismissal compensation have been on the rise since the economic downturn of 2008. Even as we emerge from the rigors of the Great Recession, wrongful dismissal cases remain staggeringly high throughout the country.

While business owners want you to believe that the rise of wrongful dismissal lawsuits is just a matter of cash-strapped Americans grasping at ways to make a quick buck, the fact of the matter is that wrongful dismissal remains a big problem across the United States.

Case Study: Carmen Segarra Files a Wrongful Dismissal Complaint Against the Fed
Take the 2013 case of Carmen Segarra v. the Federal Reserve Bank of New York, for example: according to the Project on Government Oversite (POGO), Ms. Segarra sought the aid of wrongful dismissal lawyers after the Fed fired her. In an interview with Pro Publica, Ms. Segarra claims that after uncovering evidence that the Fed was running “shady” deals with Goldman Sachs and a separate Spanish bank, while maintaining no policies for resolving conflicts between the Fed and its clients, she was fired. In other words, Ms. Segarra blew the whistle on what she viewed as a breach of the Federal Reserve’s charge to uphold the laws of the U.S. and make good on the trust placed into it by the American people.

Violation of Wrongful Dismissal Law or Good Business?
To some, most notably the defendants at the Fed, the firing of Segarra represents a smart business move. After all, Segarra was speaking against the company and being an insubordinate employee when she refused to drop the issue. As far as the Fed is concerned, they acted in a legal, reasonable way to protect their interests.

However, as far as federal employee laws are concerned, the Fed may be in the wrong. As the Department of Labor writes, the Occupational Safety and Health Commission (OSHA) maintains blanket protections for whistleblowers under 17 federal statutes. In the case of Ms. Segarra, it could be argued that under the Corporate and Criminal Fraud Liability Act and Title VIII of the Sarbanes-Oxley Act, Segarra was well within her rights to report the issues to her bosses and all relevant authorities. Further, in doing so, Segarra should have incurred no penalties, least of all being wrongfully terminated.

As with anything in the American justice system, the outcome of the case of Segarra v. the Fed cannot be determined based on outside opinion. The case will have to be decided in a court of law, as is guaranteed under U.S. law. However, it seems pretty clear that Segarra’s is a case of wrongful dismissal.