November 27, 2020

Volume X, Number 332


November 25, 2020

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PPP does not stand for ‘Personal Palace Purchase’ – Employee Alleges Whistleblower Retaliation

As discussed in previous blogs, we continue to see an uptick in workplace class and collective actions directly related to COVID-19, filings where plaintiffs’ counsel have attempted to tie a class or collective-wide wage and hour violation to the pandemic, and cases that sit at the intersection of the Paycheck Protection Program (PPP) and wage and hour laws. This week’s spotlight further highlights this trend with a case involving alleged workplace retaliation for an employee’s objection to purported misuse of PPP funds.

In Adler v. Starboard Group Management, Co. Inc., et al., the plaintiff was the defendant’s vice president of legal affairs and human resources, until she was terminated on June 1, 2020. In addition to alleging that she was sexually harassed by her supervisor – and that when she complained to the CEO, he responded by “ratifying” the harassment – the plaintiff alleges that she was directed to make false statements to the employer’s “creditors, landlords, vendors, and suppliers.” The plaintiff claims she was ordered to tell these entities that the employer “could not meet its financial obligations” because it had not received PPP funds. According to the complaint, those assertions were false; the company received almost $9 million in PPP benefits. The plaintiff alleges not only that the CEO diverted roughly $1 million of the PPP funds to finance his new home in Montana, but also that he directed the plaintiff to characterize certain personal employees in Montana as corporate employees, purportedly to “to defraud the United States and the Small Business Administration.” According to the plaintiff, when she complained to her supervisor about these actions, she was terminated. The plaintiff claims her termination violated whistleblower protections and that she was fired for engaging in protected conduct by objecting to “delivering fraudulent claims to creditors.”

This case highlights a number of relevant aspects of employment law, and paints an egregious and (hopefully) uncommon picture of an employer’s actions. 

© 2020 BARNES & THORNBURG LLPNational Law Review, Volume X, Number 197



About this Author

Peter J. Wozniak Barnes Thornburg Chicago  Labor Employment

Pete Wozniak is a vigorous advocate who strives to help his clients navigate issues that can be fraught with challenges as painlessly and efficiently as possible. He is a candid and personable counselor, offering his clients direct advice by leveraging his deep experience performing a broad range of outcome critical functions for complex labor and employment matters.

Pete represents clients across a number of industries, including transportation and logistics, restaurants, retail, manufacturing, and temporary staffing. Handling a number of high profile matters, he identifies the...

Mark Wallin, Attorney, BT, Chicago, Labor Employment
Of Counsel

In order to provide the best counsel, Mark Wallin believes it is his role to understand his clients’ business needs so he can help them determine what resolution will provide the most benefit. His keen ability to understand his clients’ practical concerns allows him to advise on the best path to successfully resolve issues – whether through traditional litigation or negotiated resolution.

In the course of his practice, Mark has focused on providing the highest-level of service to his clients and building long-term relationships. Specifically, he defends employers in a wide range of...

Sana Swe Employment Attorney Barnes & Thornburg Los Angeles, CA
Of Counsel

Sana leverages her first-hand knowledge of both sides of the employer-employee relationship to help clients navigate a range of issues and challenges. She routinely advises clients regarding employment matters arising from mergers, acquisitions, layoffs and reorganizations, and potential liability resulting from employment practices, policies, and actual and threatened litigation.

Sana represents clients in an array of employment-related areas, including unlawful discrimination, harassment, and retaliation, family and medical leaves of absence under state and federal law, disability...