Several former Bitwise Industries employees filed a class action lawsuit against the collapsed company on Wednesday after a tumultuous couple of weeks that saw all 900 of the company’s employees lose their jobs.
The eight former employees are suing Bitwise and former co-CEOs Jake Soberal and Irma Olguin, as well as board members Mitchell Kapor, Paula Pretlow, Ollen Douglass and Joseph Proietti.
The big picture: The plaintiffs, represented by Fresno attorneys Roger Bonakdar and Brian Whelan, accuse Bitwise of violating the California Worker Adjustment and Retraining Notification (WARN) Act, conducting unfair business practices and failing to properly compensate employees for all hours worked, among other allegations.
- Under the WARN Act, employees are supposed to be provided 60 days advance notice of their termination, which the plaintiffs say they did not receive.
Go deeper: According to the lawsuit, Soberal and Olguin stated that Bitwise had more than $80 million in its Central Valley Community Bank account on March 9 in an effort to induce lenders to provide loans.
- Yet the company switched over to paper checks shortly after, which the former employees say were bad and ultimately bounced.
- The lawsuit also claims that Soberal privately admitted to investors that “Bitwise is done” after the meeting on May 29 to announce the mass furloughs.
- “Jake Soberal admitted and acknowledged, a few days after the mass termination, that the Individual Defendants were mostly concerned with individual liability’ arising out the ‘employee labor claims’ with the obvious suggestion that the situation had not been handled properly,” the lawsuit reads. “Apparently, to buy time, Defendants had messaged the terminations as a ‘furlough’ to both mislead the public and the Bitwise employees,” the lawsuit reads.
