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Bryant Whitten, LLP

$6 million payout for ex-Playboy employee in whistleblower suit

California employees may be interested in news about the largest judgment yet under the whistleblower protection provisions of the federal Sarbanes-Oxley Act. This case involves an ex-employee of Playboy Enterprises who was fired in retaliation for exposing fraudulent bonuses.

According to the lawsuit, the former controller of the company refused to accrue bonuses for certain executives in 2010. The refusal was due to the losses that the company faced that year, which she categorized as significant. She says that the chief financial officer of the company exerted pressure on her to give those bonuses, even though the board had not approved them. The executive would have been the recipient of most of the bonus money. She then reported these allegations of fraud to company management.

The former controller says in her lawsuit that the executive began excluding her from meetings and then announced a plan to save money by firing employees who had been there over ten years, which would have included the controller who had been with the company for 30 years. Now, a jury has returned a verdict in her favor, and Playboy has been ordered to pay her $6 million. According to reports, the award may increase after an upcoming punitive damages hearing.

A wrongful termination in retaliation for reporting violations or refusing to commit illegal acts can be the basis for a claim against the employer. This claim can lead to compensatory and perhaps punitive damages under the law, as in the case against Playboy. An attorney who practices in the area of wrongful termination may be able to help investigate the discharge and bring an action for damages against the responsible party.

Source: USA Today, "Playboy must pay $6M to fired whistleblower", Evann Gastaldo, March 07, 2014

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