Ex-JPMorgan Official Says Firing Tied to Housing Bias Case

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Former JPMorgan Banker Wayne Trotman
Former JPMorgan Chase & Co. banker Wayne Trotman. Source: Stacy Clark Marketing LLC via Bloomberg

A former JPMorgan Chase & Co. banker claims he was fired because he wouldn’t take part in a plan to prolong a U.S. Supreme Court case in the hope it would loosen federal housing protection for minorities.

Wayne Trotman says in a lawsuit that he refused the bank’s directive to stall a settlement of a lawsuit pending before the Supreme Court involving redevelopment in a New Jersey town. The delay was meant to encourage the U.S. Supreme Court to decide whether to retain an anti-discrimination law favored by the Obama administration, he said. Trotman said he was fired after saying no to the plan and the high court dismissed the case.

Trotman’s refusal to “undermine” the settlement and “advance the agenda of his employer and other banks” was an objection to a practice that was incompatible with public policy, his lawyers said Monday in a complaint filed in state court in Philadelphia.

At issue was a legal doctrine known as disparate impact theory, which focuses on the effect of a policy on minority groups without requiring evidence of discriminatory intent. JPMorgan and other banks hoped the Supreme Court case would shield lenders from discrimination suits by striking down a federal regulation based on the theory, Trotman said.

President Barack Obama’s administration has relied on disparate-impact arguments in lawsuits over housing and auto loans. Banks have agreed to pay at least $480 million to settle such claims since December 2011.

Blighted Area

“Mr. Trotman’s claims are baseless -- we fully intend to fight this in court,” Trish Wexler, a JPMorgan spokeswoman, said in a phone interview. Trotman’s position was eliminated after a reorganization of markets, she said.

The housing settlement Trotman says he was asked to delay stems from an effort by Mount Holly, New Jersey, to redevelop a 30-acre blighted, high-crime neighborhood known as the Gardens. A group of current and former residents sued claiming the town’s plan would have a disparate impact on minorities since the area is the only predominantly black and Hispanic area in town.

Under the accord reached in November 2013, the township could proceed with development of the area in exchange for the construction of 44 “emerging market” homes in the neighborhood.

Trotman, who worked in the bank’s Mid-Atlantic commercial-banking group and also served as director of The Reinvestment Fund, a nonprofit group that helped broker the deal, said he was directed by JPMorgan to delay the fund’s vote to finance the settlement.

Reject Theory?

According to Trotman, JPMorgan and other banks predicted the Supreme Court would reject disparate impact theory and instead consider requiring proof of intentional discrimination.

The directive followed an e-mail seeking to delay the accord sent by former Minnesota Governor Tim Pawlenty to JPMorgan Chief Executive Jamie Dimon and CEOs of PNC Financial Services Group Inc., Royal Bank of Scotland Group Plc and M&T Bank Corp., according to the complaint.

Following Trotman’s refusal, JPMorgan significantly reduced his bonus in January 2014 and gave him a poor mid-year evaluation before firing him in September, according to the complaint. The company “defamed” him by saying he was terminated for “performance related reasons,” according to the filing.

The case is Trotman v. JPMorgan Chase & Co., 150501681, Court of Common Pleas, Philadelphia County (Philadelphia).

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