Ramanathan v. Bank of America
Section 24 (Fifth) of the National Bank Act (NBA) provides the following powers to a duly organized national banking association: To elect or appoint directors, and by its board of directors to appoint a president, vice president, cashier, and other officers, define their duties, require bonds of them and fix the penalty thereof, dismiss such officers or any of them at pleasure, and appoint others to fill their places. (12 U.S.C.A. 24 (Fifth).) Courts have long recognized that the power conferred by Section 24 (Fifth) on national banks to dismiss its officers at pleasure is protected by the doctrine of preemption from all state law claims filed by their former officers for breach of an employment agreement. (See, e.g., Mackey v. Pioneer Nat. Bank (9th Cir. 1989) 867 F.2d 520, 524-536.) Courts have also acknowledged the doctrine of preemption protects national banks that dismiss their officers under Section 24 (Fifth) from state law discrimination claims filed by their former officers, although in this regard, courts have differed on whether such preemption is total or partial. (Cf. Aalgaard v. Merchants Nat. Bank, Inc. (1990) 224 Cal.App.3d 674, 695 [claims under state age discrimination statute totally preempted by Section 24 (Fifth)] with Marques v. Bank of America (1997) 59 Cal.App.4th 356, 363-364 [state antidiscrimination claims under FEHA preempted only to the extent they conflict with federal antidiscrimination laws].)
Because the Bank failed to prove Ramanathan was an officer of the bank under Wells Fargo, it was not entitled to summary judgment on grounds of preemption under Section 24 (Fifth). Accordingly, Court reverse the summary judgment awarded in favor of the Bank and remand for further proceedings.
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