Litigation
Feb. 8, 2017
Former Bio-Rad general counsel wins wrongful termination suit
A federal jury decided Monday afternoon that Bio-Rad Laboratories Inc. should pay its former general counsel, Sanford S. Wadler, for wrongful termination.
Daily Journal Staff Writer
SAN FRANCISCO ? A federal jury decided Monday that Bio-Rad Laboratories Inc. should pay its former general counsel, Sanford S. Wadler, for wrongful termination.
The jury awarded $2.9 million in past economic damages and another $5 million in punitive damages.
The former sum could be doubled later under the terms of the Sarbanes-Oxley Act because jurors concluded Wadler was fired because of whistleblowing.
Wadler's attorney, James M. Wagstaffe of Kerr & Wagstaffe LLP, sought more than $30 million in total damages.
Wadler said the company wrongfully terminated him because he was causing a nuisance by trying to investigate potential corruption.
Closing arguments earlier Monday were filled with dueling accusations of perjury..
Bio-Rad alleged that its former general counsel fabricated concerns about potential corruption in the company's dealings with China in order to save his job or get a settlement from the company by becoming a whistleblower. Wadler v. Bio-Rad Laboratories et al., 15-CV2356 (N.D. Cal., filed May 27, 2015).
Wagstaffe said the jury must decide not whether the Foreign Corrupt Practices Act investigation at the company uncovered actual corruption, but whether Wadler truly believed at the time that the suspected issues were real.
He told jurors it's important for whistleblowers to point out potential problems early so that they can be investigated and addressed before the problem grows. He argued that a trove of missing documents associated with the company's operations in China were exactly those warning signs.
"Do we wait until we are burning to pull the alarms? Do we wait to actually see fire?" he asked the jury before answering his own question. "We pull the alarm when we smell smoke. There was clearly smoke coming from China."
John Potter of Quinn Emanuel Urquhart & Sullivan LLP, representing Bio-Rad, countered that the company had a history of addressing issues under the Foreign Corrupt Practices Act and therefore the concept that it would fire an employee of 25 years over raising similar concerns was irrational.
He said that co-workers began to notice a decline in Wadler's mental functioning and that he was becoming overly stressed and contentious with his colleagues.
Potter said CEO Norman Schwartz received multiple recommendations to fire Wadler over the years, including one from the company's board of directors, and instead remained loyal to his longtime employee.
"The guy who kept him in that position was Norman Schwartz," Potter said. "No good deed goes unpunished."
Potter argued that Wadler's investigation was a huge waste of the company's money and time and displayed incompetence which led to his firing.
"The plaintiff should be aghast, mortified that he caused his company to spend over a million [dollars] on this wild goose chase," Potter said.
Wagstaffe countered that the company's willingness to pay that legal bill was actually evidence of the serious nature of the investigation. He said the company and its attorneys wouldn't have dug so much if they didn't agree with Wadler that the risk of corruption was real.
The plaintiffs' attorney said the key piece of evidence in the case was a computer file, an annual review of Wadler, which was created in July 2013, but backdated to April 15, a date before the firing occurred.
Wagstaffe told the jury Schwartz lied in testimony about when the file was created and then changed his story after he later learned that forensic technology showed his statements were inaccurate.
He went on to allege that Bio-Rad created this performance review when they realized that they had never given Wadler a negative review, which would look bad in an employment case.
Schwartz previously testified that he wrote the original version of the review months earlier and that he often works off written notes before transferring the information to his computer.
Wagstaffe argued that all the previous performance reviews were done later in the year, and that it stretched credulity that the company happened to create a review that made it look better at the exact moment when it was most beneficial.
"In what was the most despicable act of this trial, they created a draft review, then they lied to us in deposition," Wagstaffe said.
joshua_sebold@dailyjournal.com
Joshua Seboldn
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