Schmidt v. Wells Fargo & Co.

John Schmidt (plaintiff) worked for Wells Fargo & Company and affiliated banking entities (collectively, Wells Fargo) (defendants) under a five-year employment contract from 2011 to 2016. Near the end of Schmidt’s five-year term, Schmidt became head of the Supply Chain Finance Group. Under federal law, as of July 21, 2017, bank employees could not invest in certain types of funds sponsored by the bank. Schmidt had invested nearly $4.5 million in Wells Fargo-managed hedge funds, but Wells Fargo representatives had purportedly assured Schmidt that Schmidt would have several months into 2017 to redeem his investments to ensure compliance with the federal law. However, on December 8, 2016, Wells Fargo told Schmidt that Wells Fargo was accelerating the compliance deadline to December 31, 2016, and further told Schmidt that Wells Fargo could not tell Schmidt how much of the investments Schmidt would need to redeem to continue working for Wells Fargo. Schmidt decided to resign from Wells Fargo to retain his full investments. Schmidt then sued Wells Fargo in federal district court, asserting a promissory-estoppel claim and seeking damages, including the lost salary and benefits for the remainder of the five-year employment term. Specifically, Schmidt asserted that Wells Fargo had promised Schmidt time to make a redemption decision regarding the investments and that Schmidt had been forced to quit because Wells Fargo had not actually given enough time to make the decision. Nowhere in the complaint did Schmidt allege that he would have redeemed his investments in July 2017 so that Schmidt could have remained employed with Wells Fargo. Wells Fargo moved to dismiss.