Call nowEmail Us

Schedule your free Consultation

(877) 789-9707


*At this time, we are only conducting phone consultations, please no walk-ins.

Banking Industry Employee? Beware the National Bank Act!

Gloria (not her real name) was recently terminated under the guise of a “lay off” by a large, nationally-charted bank. (A national bank is one chartered and regulated by the Office of the Comptroller of the Currency. Check their Web site ( bank-lists.html) to see if your bank employer is either nationally chartered or a subsidiary covered under the same law). Gloria wanted to know if she was allowed to sue for pregnancy discrimination as she believed (and the evidence supported that belief) that she was the only one “laid off” in her branch.

The National Bank Act provides that an “officer” of a national bank may be dismissed “at pleasure”. If Gloria is not an “officer”, then this law does not apply to her and all of the normal protections of State and Federal Law would apply.  Would it matter, say, if Gloria who essentially did teller duties, was improperly labeled a Vice President, even though she did not have authority to bind the bank in matters with borrowers, customers, or other third parties? Clearly, the actual authority is more important than the title. Banks are known to bestow high-level, important sounding titles on lower-level employees in lieu of pay raises. Even after we determine whether Gloria is an officer, we then need to know if her termination was ratified by the board of directors. Case law seems to indicate that if Gloria brings her claims until Title VII of the Civil Rights Act of 1964, as amended, or if she had an age claim, then she would find her case not pre-empted and be allowed to sue.

The issue of pregnancy discrimination under California’s Fair Employment and Housing law is less clear. In Peatros vs. Bank of America, 22 Cal 4th 147 (2000) the plaintiff, a Vice President, alleged she had been terminated due to age and raise. In what was a mixed decision, the California Supreme Court held that section 24 of the National Bank Act had been amended by implication by Title VII and the Age Discrimination in employment Act and that a national bank did not have the right to dismiss at pleasure if the termination was based on race, color, religion, sex, national origin or age. Perhaps the best view on the application of California State disability law, is found in Quinn vs. US Bank, NA, 196 CA 4th 168 (2011), where the court determined that section 24 of the National Bank Act does not pre-empt state disabilities laws to the extent the FEHA is not inconsistent with section 24.

The issue of what is and is not pre-empted is fact-specific and dependent on evolving case law that employees who “may” be considered officers of a national bank that a board has terminated with approval should probably file under both state FEHA and federal Title VII and ADEA or ADA basis. This may of course provide defendant with an excuse to remove the case to federal court (“federal question” jurisdiction), but at least a forum would be available to vindicate most rights.

Oh, and about Gloria: We are pleased to report that when we presented the bank with evidence that her job did not involve high level authority, but she was simply a line teller (and hired specifically for that job), the bank saw the wisdom of settling the case. (They would not have been able to show ratification of her termination/lay off by their board, but never mind, we didn’t need to remind them).

We will be reviewing other industries from time to time, such as securities, unions, employee benefits (“ERISA”), undocumented workers and the like. Each such industry presents specific issues of pre-emption and careful fact analysis and pleading is the only way to assure the survival of your claim for ultimate determination by a judge, jury or arbitrator.  This column is educational only and legal advise can be given only by an attorney licensed in your jurisdiction and familiar with the facts of your case. We represent employees throughout California.

Further industry-specific information can be gotten from both the California Banker’s Association and the

American Bankers Association.