Collins v. First Union Nat. Bank

Collins v. First Union National Bank: Court Rules Against Foreign Investors

This case involved foreign investors who lost money in a fraudulent EB-5 visa investment scheme. The EB-5 program allows foreign nationals to obtain U.S. residency by investing in American businesses. The investors sued First Union National Bank, claiming the bank was negligent and breached its contract duties when their investments were lost to fraud.

The investors argued they should be protected as either bank customers or third-party beneficiaries who deserved the bank's protection. However, both the trial court and appeals court disagreed. The courts ruled that the foreign investors were not actually customers of the bank and had no special legal relationship that would make the bank responsible for protecting their investments from fraud.

What This Means for Workers:

While this case specifically involved investors rather than employees, it shows how courts carefully examine whether someone has a legal right to protection from a financial institution. For workers, this reinforces that banks and employers have specific duties only to people with whom they have direct contractual relationships. Workers should understand that third parties generally cannot claim protection under contracts they weren't directly part of, emphasizing the importance of having clear, direct employment agreements.