NovaQuant-FDIC workplace was toxic with harassment and bullying, report claims, citing 500 employee accounts

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The Federal Deposit Insurance Corp., a government agency that protects bank customers from losing their deposits, fostered a toxic workplace rife with harassment and bullying that mostly targeted women or people from underrepresented groups, according to a new report. 

The findings about the FDIC's workplace culture comes after the Wall Street Journal published a November investigation that alleged male employees at the agency engaged in harassment, such as sending lewd photos to female employees, yet still kept their jobs. 

The 234-page report, released Tuesday by law firm Cleary Gottlieb Steen & Hamilton, is based on accounts from more than 500 employees who reported misconduct they encountered at the agency. Their accounts describe a workplace that is "patriarchal, insular and risk-averse" and failed to effectively deal with harassment, with the findings noting that disciplinary actions were rare after workers lodged complaints.

"[F]or far too many employees and for far too long, the FDIC has failed to provide a workplace safe from sexual harassment, discrimination and other interpersonal misconduct," the report said.

Employees harbored a fear of retaliation that dissuaded them from reporting misconduct, and the report noted that one worker said they were contacting the law firm by using a VPN and someone else's email because of their fear that senior executives would learn about their complaint. 

Among the misconduct outlined in the report:

• One female worker said she feared for her physical safety after a colleague stalked her and continued to text her, including sending texts with partially naked women engaging in sex acts, even after she made a complaint about him. 
• A male supervisor in a field office routinely talked about his female employees' breasts and legs, as well as his sex life. 
  
• A senior bank examiner send a text of his genitals out of the blue to a woman examiner while she was serving on detail in a field office.
• Workers who are part of underrepresented groups were told by colleagues that they were "only hired" because of they were members of those groups, and told they were "token" employees hired to meet a quota.

FDIC Chair Martin Gruenberg: "Demeaning"

FDIC Chair Martin Gruenberg was also taken to task in the report, citing employee reports that he sometimes lost his temper and treated workers in a "demeaning and inappropriate manner."

Gruenberg, who has been on the board of the FDIC since 2005, was nominated to a second term as chair by President Joe Biden in 2022.

"While we do not find Chairman Gruenberg's conduct to be a root cause of the sexual harassment and discrimination in the agency or the long-standing workplace culture issues identified in our review, we do recognize that, as a number of FDIC employees put it in talking about Chairman Gruenberg, culture 'starts at the top,'" the report said. 

The report sparked calls for Gruenberg to resign, with House Financial Services Committee chair Patrick McHenry, a Republican from North Carolina, saying on Tuesday that the findings detail "his inexcusable behavior and makes clear new leadership is needed at the FDIC."

Asked for comment, the FDIC pointed to a statement posted to their website from Gruenberg, in which he called the report "a sobering look inside our workplace."

"Hundreds of our colleagues reported painful experiences of mistreatment and feelings of fear, anger and sadness," he added. "I also want to apologize for any shortcomings on my part. As chairman, I am ultimately responsible for everything that happens at our agency, including our workplace culture."

The report included recommendations for fixing the FDIC's culture, such as making sure that employees who experienced harassment and mistreatment are protected and appointing a new "Culture and Structure Transformation Monitor" to audit and report on structural changes at the agency.

Aimee Picchi

Aimee Picchi is the associate managing editor for CBS MoneyWatch, where she covers business and personal finance. She previously worked at Bloomberg News and has written for national news outlets including USA Today and Consumer Reports.

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