Case 5:24-cv-02966-EKL Document 52 Filed 04/15/25 Page 1 of 50
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`LAW OFFICES OF HILARY HAMMELL, A.P.C.
`Hilary P. Hammell, Esq. (SBN 291347)
`212 Ninth St., Suite 314
`Oakland, CA 94611
`Tel: (510) 250-3175
`Email: hilary@hammell.law
`
`AIMAN-SMITH & MARCY
`Randall B. Aiman-Smith, Esq. (SBN 124599)
`Reed W. L. Marcy, Esq. (SBN 191531
`Lisseth Bayona, Esq. (SBN 338135)
`7677 Oakport Street, Suite 1000
`Oakland, CA 94621
`Tel.: (510) 760-7005
`Email: ras@asmlawyers.com
` rwlm@asmlawyers.com
` lb@asmlawyers.com
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`Attorneys for Plaintiff LARRY MCCLURE
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`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`LARRY MCCLURE, an individual,
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`Plaintiff,
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`PANZURA, LLC., and DOES 1-50,
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`
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`Defendant.
`
`vs.
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` Case No.: 5:24-cv-02966-EKL
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`
`FIRST AMENDED
`COMPLAINT
`
`(1) Retaliatory Discharge (Cal. Lab.
`Code § 1102.5).
`(2) Retaliation in Violation of the
`Fair Employment and Housing
`Act
`(3) Failure to Take All Reasonable
`Steps to Prevent Retaliation in
`Violation of Gov. Code §
`12940(k)
`(4) Retaliation in Violation of Title
`VII (42 U.S.C. § 2000e et seq.)
`(5) Wrongful Termination in
`Violation of Public Policy
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`REQUEST FOR PUNITIVE
`DAMAGES
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`DEMAND FOR JURY TRIAL
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`1
`FIRST AMENDED COMPLAINT
`McClure v. Panzura, LLC Case No. 5:24-cv-02966- EKL
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`Case 5:24-cv-02966-EKL Document 52 Filed 04/15/25 Page 2 of 50
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`I.
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`Plaintiff is informed and believes and thereupon alleges the following:
`INTRODUCTION
`1.
`Plaintiff Larry Brent McClure (“Plaintiff”) brings these claims against Defendants
`Panzura LLC, and Does 1-50, inclusive, for violations of California and federal law.
`2.
`Plaintiff has been injured by Defendants’ unlawful retaliation against him in
`violation of Labor Code § 1102.5, Title VII of the Civil Rights Act, and the Fair Employment and
`Housing Act;; and by Defendants’ wrongful termination in violation of public policy.
`3.
`For these injuries, Plaintiff seeks compensatory damages, statutory penalties,
`punitive damages, prejudgment interest, reasonable attorneys’ fees, and reasonable costs
`(including expert-witness fees).
`4.
`Plaintiff seeks to recover his reasonable attorneys’ fees and costs (including expert-
`witness fees) pursuant to Labor Code §1102.5; Gov. Code §12965(b), California Code of Civil
`Procedure §1021.5; and 42 U.S.C. § 2000e-5(k).
`5.
`Plaintiff submits this Amended Complaint in light of the Northern District of
`California’s ruling on Defendant’s Motion to Dismiss (ECF 50). Attached as Exhibit A is a
`redlined document showing the changes made to the previously-filed Complaint, pursuant to the
`Court’s Standing Order for Civil Cases.
`II.
`PARTIES
`6.
`Plaintiff is a natural person and a resident of Mobile, Alabama.
`7.
`Defendant Panzura LLC (“PANZURA”) is a Limited Liability Company that is
`organized and existing under the laws of the State of Delaware, licensed to do business in
`California, doing business in California, with its corporate headquarters and principal executive
`office located in San Jose, California in Santa Clara County.
`8.
`Plaintiff is ignorant of the true names or capacities of defendants named herein as
`Does 1 through 50, inclusive, and therefore sues these defendants by these fictitious names. When
`the names and capacities of these defendants are ascertained, Plaintiff will amend this complaint
`accordingly. Each of the defendants named herein or designated as a Doe is liable or in some
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`FIRST AMENDED COMPLAINT
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`manner legally responsible for the events alleged herein.
`9.
`At all relevant times, each of the Defendants was the agent or employee of each of
`the remaining Defendants and, in doing the things alleged herein, was acting within the course and
`scope of such agency or employment.
`10.
`Each of the Defendants’ actions or omissions as alleged herein was ratified by each
`of the remaining Defendants.
`11.
`Each of the acts or omissions of a defendant’s agents as alleged herein was ratified
`by that defendant, as well as by each of the remaining Defendants.
`12.
`Each of the acts or omissions of a defendant as alleged herein was done with the
`knowledge each of the remaining Defendants, and done in furtherance of a conspiratorial
`agreement with each of the remaining Defendants.
`13. As used herein, “Defendants” includes both Defendant PANZURA LLC and Does
`1 through 50, inclusive.
`III.
`JURISDICTION AND VENUE
`14.
`This Court has subject matter jurisdiction over this action under California Code of
`Civil Procedure § 410.10 and the California Constitution, article VI, section 10.
`15.
`This Court has specific and general personal jurisdiction over Defendants because
`Defendants’ contract with PLAINTIFF was formed in California, Defendants employed
`PLAINTIFF and other employees in California, PLAINTIFF’s contractual performance took place
`within California, Defendants have significant contacts with California by virtue of their extensive
`business operations in California, and have purposefully availed themselves of the privileges and
`immunities of conducting business in California.
`16. Venue was proper in Santa Clara County under Gov. Code § 12965(c)(3) because
`the unlawful practices were committed in Santa Clara County, the records relevant to the unlawful
`practices are maintained and administered in Santa Clara County, and because PLAINTIFF would
`have worked in Santa Clara County but for the alleged unlawful practices.
`17. Defendant Panzura filed notice of removal to the United States District Court
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`for the Northern District of California on May 16, 2024 (Dkt #1), which was granted.
`Venue and jurisdiction in the Northern District court is proper pursuant to a federal
`question (Title VII claim, 42 U.S.C. § 2000e, et seq.).
`IV.
`STATEMENT OF FACTS
`18. Defendants do business as PANZURA, LLC. Defendants make and provide a
`software for businesses to help businesses manage and move data. The company is privately held.
`19.
`In or around 2022, PLAINTIFF met Jill Stelfox, at the time the CEO of
`PANZURA, in Denver, Colorado. CEO Stelfox offered PLAINTIFF the job of Chief Financial
`Officer of PANZURA, and PLAINTIFF agreed to accept the offer.
`20. Defendants employed PLAINTIFF as Chief Financial Officer from approximately
`March 16, 2022 through January 18, 2024, when Defendants terminated him.
`21.
`PANZURA gave PLAINTIFF an employment contract when he was offered the
`job, on PANZURA’s letterhead showing its location at “2880 Stevens Creek Blvd, Ste. 100, San
`Jose, CA 95128.” The contract provided that PLAINTIFF would primarily work from home from
`his residence in Denver, Colorado, and would, “at all times to the best of [his] ability and
`experience loyally and conscientiously perform all of the duties required of and from [him].” He
`was offered a base salary of $300,000, a target bonus of 50% of his base salary, benefits, and “an
`opportunity to participate in” an equity award program. The employment contract states: “this
`letter will be governed by the laws of the State of California without regard to its conflict of law
`provision.” The employment contract is attached to this Complaint as Exhibit A.
`22.
`PANZURA is a “remote-first” company with a California base of operations. Many
`employees work from home in various states, but travel frequently for PANZURA business,
`including often to its corporate headquarters. Its corporate headquarters is located in San Jose,
`California, where PANZURA employs approximately 50-60 employees. A C-level employee such
`as PLAINTIFF was expected to work from the California headquarters regularly. PLAINTIFF
`traveled for work for PANZURA frequently. Plaintiff worked for PANZURA from many
`locations, including London, Texas and Alabama, and physically worked from California at least
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`approximately 25% of the time. PLAINTIFF was required to perform work in California
`throughout the year, including for quarterly Board meetings, which took place in California. While
`PANZURA’s headquarters has always been in California, during the COVID-19 pandemic there
`was a period in which in-person meetings in San Jose, California offices were prohibited, while
`the state of Texas had no such prohibition. Accordingly, during PLAINTIFF’s employment,
`shortly after he joined the company, PANZURA opened a field office in Texas, where two other
`C-suite executives lived, so as to permit more in-person meetings. PLAINTIFF relocated from
`Denver to a rental condo in Texas and worked primarily out of that office, while traveling often to
`California for work; however, PLAINTIFF’s intention was to relocate to California permanently
`to work for PANZURA once the need for this temporary field office ceased. By December 2023,
`since there was no longer any reason not to hold in-person meetings in California, PANZURA was
`in the process of closing down the Texas office, and PLAINTIFF was planning to relocate to
`California so as to work from the California office even more frequently.
`23.
`Beginning in or around May of 2020, Defendants employed Jill Stelfox as CEO,
`and Dan Waldschmidt as Chief Revenue Officer. Both Stelfox and Waldschmidt owned a small
`stake in the Company. The majority of the company was owned by Profile Capital Management
`LLC, a venture capital firm. The two Profile partners, Ben Chereskin and Ryan Varavedekar, were
`on PANZURA’s Board of Directors. From around May of 2020 to the present, Waldschmidt held
`a position on the PANZURA Board of Directors.
`24.
`CEO Jill Stelfox worked from California the majority of the time.
`25.
`Jill Stelfox had a successful track record as CEO of the company during her tenure.
`26.
`In 2022, Waldschmidt did not deliver the sales numbers he had promised to
`PANZURA’s board, blew through millions of dollars of his budget, and entered into several
`agreements with customers and vendors that had to be reversed.
`27.
`In or around late 2022, PLAINTIFF became aware that Mr. Waldschmidt was
`talking about separating from his wife.
`28. Also in or around late 2022, PLAINTIFF noticed that Mr. Waldschmidt, along with
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`a female junior employee on the strategic sales team (who for the purposes of this Complaint will
`be referred to as “Junior Female Employee” or “J.F.E.”) had traveled to the Middle East using
`Panzura funds. The J.F.E., at the time, reported directly to Waldschmidt. These trips were
`expensive, costing more than $20,000 each, so PLAINTIFF was concerned about whether there
`was a legitimate business purpose. These trips were ostensibly to try to secure deals, but the two
`stayed longer than made sense for the business. And, to PLAINTIFF’s understanding, no deals
`resulted from this trip. PLAINTIFF believed this trip was not in PANZURA’s interests but may
`have been for Waldschmidt to try to spend time with the Junior Female Employee for sexual
`purposes. PLAINTIFF complained to CEO Jill Stelfox about Waldschmidt’s use of company
`funds for this trip with Junior Female Employee. When Waldschmidt and the Junior Female
`Employee returned from Saudi Arabia in late December 2022, CEO Stelfox told PLAINTIFF that
`the Junior Female Employee was talking about leaving her husband. This caused PLAINTIFF
`even more concern that these Saudi Arabia trips were not for legitimate business reasons and were
`depleting company funds for personal reasons of Waldschmidt’s. PLAINTIFF was concerned that
`there may have been a sexual relationship between Waldschmidt and the Junior Female Employee,
`which involved a power differential and possibly coercion, given that the J.F.E. reported to
`Waldschmidt. PLAINTIFF reported to CEO Stelfox that Waldschmidt being on the Board, and
`being Chief Revenue Officer, made it especially problematic that he was spending Company
`money to facilitate sexual/romantic conduct with a subordinate employee.
`29.
`Starting in or around February 2023, Waldschmidt took a leave of absence from
`PANZURA. He returned in April 2023, and was appointed Chief Transformation Officer. This
`role had no budget authority and no direct reports.
`30.
`In or around March of 2023, PANZURA issued compensation letters and
`commission plans to commission-based employees, including the Junior Female Employee. The
`J.F.E’s commission structure was exactly the same as that of her two male coworkers, who had the
`same or substantially similar job roles on the strategic sales team.
`31.
`In or around May and June of 2023, the Junior Female Employee was identified for
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`layoff during a round of layoffs. Waldschmidt petitioned CEO Stelfox and PLAINTIFF not to lay
`the J.F.E. off, which PLAINTIFF found highly irregular, since at this point the J.F.E. was no
`longer reporting to Waldschmidt nor in his chain of command.
`32.
`In Spring or Summer of 2023, Head of HR Shelby Stelfox (the daughter of Jill
`Stelfox) reported to PLAINTIFF that Waldschmidt and the Junior Female Employee did not book
`travel using the Company’s platform, in violation of Company policy; instead, they booked their
`own travel and submitted expenses later. PLAINTIFF instructed the J.F.E. to follow company
`policy when booking travel, but she did not comply.
`33.
`In or around August of 2023, Waldschmidt called PLAINTIFF and demanded to
`see all sales compensation agreements. He at first would not tell PLAINTIFF why he wanted this
`information, but it ultimately became clear that he wanted to help the Junior Female Employee
`increase her compensation. PLAINTIFF was concerned, because this was not the Chief
`Transformation Officer’s role, who had no direct reports, and PLAINTIFF had concerns about a
`potential quid-pro-quo sexual relationship. Waldschmidt insisted that PLAINTIFF do what he
`wanted, saying words to the effect of: “I’m a co-re-founder and Board Member, I should have
`access to everything.” PLAINTIFF reported to CEO Stelfox what had happened. PLAINTIFF
`expressed to CEO Stelfox that he was concerned that Waldschmidt was having a sexual
`relationship with the Junior Female Employee and was trying to get her paid more. PLAINTIFF
`was concerned that giving the J.F.E. favorable pay under these circumstances could violate the
`law. He told CEO Stelfox that he did not believe PANZURA could pay the J.F.E. more than her
`colleagues.
`34. On December 3, 2023, Waldschmidt flew to Chicago to meet with Ben Chereskin,
`a member of PANZURA’s Board and a partner at Profile. On information and belief, in that
`meeting, Waldschmidt and Board Member Chereskin spoke about a plan for Waldschmidt to exit
`PANZURA. After his meeting in Chicago, Waldschmidt came to the PANZURA office in San
`Jose, California.
`35. Also on December 3, 2023, PLAINTIFF flew to San Jose, California, to attend
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`meetings at the PANZURA corporate office in San Jose during that week.
`36.
`In 2023, at various times, PLAINTIFF complained to CEO Stelfox that he believed
`Waldschmidt’s conducting a sexual relationship with a subordinate employee on company time
`and using company funds could violate the law. PLAINTIFF also complained to CEO Stelfox that
`he was concerned that Waldschmidt’s attempts to secure higher compensation for the J.F.E. than
`her male peers could violate the law.
`37.
`In meetings in San Jose California in December 2023, both Waldschmidt and the
`Junior Female Employee petitioned PLAINTIFF to give the Junior Female Employee a more
`generous commissions package than her male peers. The J.F.E. told PLAINTIFF, angrily, that
`Waldschmidt had promised her a change to her commission structure. PLAINTIFF insisted that
`PANZURA would not change her pay, and that it was not Waldschmidt’s job to influence the
`J.F.E.’s pay. PLAINTIFF did not believe that the Junior Female Employee merited a pay increase
`based on her work performance.
`38. During meetings in San Jose, California during December 2023, PLAINTIFF and
`CEO Stelfox met with Waldschmidt every day, sometimes several times a day, and in each
`meeting Waldschmidt expressed anger and frustration with PLAINTIFF and Stelfox for refusing
`to approve his desired pay increase for the Junior Female Employee.
`39. During meetings in San Jose, California, in December 2023, PLAINTIFF and CEO
`recommended that the J.F.E. be fired because she had not driven any significant revenue.
`40. During meetings in San Jose, California, during December 2023, PLAINTIFF
`complained to CEO Stelfox once again about the issues he had previously raised to her, including
`Waldschmidt’s use of company funds to travel to the Middle East with the Junior Female
`Employee, saying words to the effect of, “there’s no way they’re not sleeping together.” During
`the week of meetings in San Jose, California, during December 2023, HR Director Shelby Stelfox
`showed expense records to PLAINTIFF that showed that Waldschmidt and the J.F.E. had been
`having meals together on Panzura’s dime, for no discernible business purpose. PLAINTIFF was
`concerned that Waldschmidt was trying to get PANZURA to provide preferential treatment to the
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`J.F.E. in exchange for sexual favors. PLAINTIFF communicated to CEO Stelfox that he believed
`the Junior Female Employee and Waldschmidt were having an affair, and that it was a “lawsuit
`waiting to happen.”
`41. During meetings in San Jose, California, during December 2023, CEO Stelfox told
`PLAINTIFF that she would confront Waldschmidt about the abuse of company finances to
`support his conduct with the Junior Female Employee and on or around December 7, 2023, CEO
`Stelfox confronted Waldschmidt about his interference in the J.F.E.’s compensation and his
`attempt to make her compensation unequal and unfair. PLAINTIFF observed Waldschmidt
`become agitated and angry at CEO Stelfox. PLAINTIFF observed CEO Stelfox visibly shaken
`after this interaction.
`42. While PLAINTIFF was in California in December 2023 for PANZURA meetings,
`PLAINTIFF contacted a lawyer at Jones Day for advice regarding Waldschmidt’s request to pay
`the J.F.E. more than her male comparators. PLAINTIFF feared that such a compensation change
`would violate the law.
`43. On information and belief, during the December 2023 meetings in San Jose,
`California, Waldschmidt became angered and frustrated by PLAINTIFF and CEO Stelfox’s
`refusal to give the Junior Female Employee unfairly favorable compensation and by their desire to
`fire the J.F.E., and he realized that PLAINTIFF and CEO Stelfox were aware of his sexual
`relationship with the J.F.E.
`44. During the December 2023 meetings in San Jose, California, Waldschmidt made
`the decision to retaliate against CEO Stelfox and PLAINTIFF for opposing his conduct by ousting
`CEO Stelfox, PLAINTIFF, and those associated with them, from the company.
`45. During PANZURA events and meetings during early January 2024, Waldschmidt
`began to flaunt his sexual relationship with the Junior Female Employee. It seemed that he was no
`longer trying to hide it – touching her in ways visible to employees, at company events,
`disappearing together in the middle of the day, and causing employees to wonder whether they
`were sleeping together.
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`46. On or around January 11, 2024, CEO Stelfox directly confronted Waldschmidt
`about whether he was sleeping with the J.F.E. Waldschmidt admitted it, and said it was a “friends
`with benefits” situation. CEO Stelfox told him he should not be sleeping with a subordinate, and
`that the company could be liable for sexual harassment under these circumstances. Waldschmidt
`said something to the effect of “I’ll do whatever I want.” CEO Stelfox also told Waldschmidt that
`his misuse of company funds to support the affair was fraudulent and potentially illegal.
`47.
`The next day, January 12, 2024, PANZURA Board Members instructed CEO
`Stelfox and PLAINTIFF to come to Chicago the following week, on January 18, for a review of
`the 2023 results and draft of the 2024 strategic plan.
`48. On January 18, 2024, PLAINTIFF and CEO Stelfox arrived in Chicago at 10:00
`am, at the offices of the law firm of Ropes and Gray, which had been retained by Profile, to meet
`with the two Profile partners and PANZURA Board Members, Ryan Varavedekar and Ben
`Chereskin. Chereskin and Varavadekar hugged CEO Stelfox and shook PLAINTIFF’s hand.
`Everyone smiled and made small talk about their holidays. CEO Stelfox asked to add a discussion
`about Waldschmidt to the agenda, to which Chereskin agreed. Her intention was to disclose
`Waldschmidt’s conduct with the Junior Female Employee.
`49.
`PLAINTIFF presented the 2023 Results deck in depth to Chereskin and
`Varavedekar followed by general Q&A. The numbers should have been celebrated. PANZURA’s
`annual recurring revenue (“ARR”) had increased in 2023. CEO Stelfox and PLAINTIFF had cut
`expenses, including several contracts Waldschmidt had signed outside the standard procurement
`process, and Stelfox and PLAINTIFF had guided PANZURA to cashflow positive and break-even
`in 2024. PLAINTIFF had worked hard to get PANZURA out of bad deals that Waldschmidt had
`entered into, which were causing the company to lose money. This was a major accomplishment
`by PLAINTIFF. Based on published private equity metrics, these results were best-in-class. No
`one from the Board criticized PLAINTIFF or CEO Stelfox’s performance in this meeting or
`expressed concern about the 2023 results.
`50. Next, PLAINTIFF and CEO Stelfox presented the 2024 Strategic Plan and pipeline,
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`walking Chereskin and Varavadekar through Q1’s top deals in detail, followed by the 2024
`Financial Operating Model. The 2024 Financial Operating Model showed ample predicted growth
`in the base case and even more growth in the best-case model.
`51. At or around 1:30 pm CST, after PLAINTIFF had presented the Strategic Plan and
`the 2023 Results for over three hours, Chereskin asked PLAINTIFF to temporarily step out of the
`meeting. PLAINTIFF moved to the adjacent conference room.
`52. Without PLAINTIFF present, Chereskin, reading from a script on his cell phone,
`told CEO Stelfox she was being fired. Chereskin told Stelfox she had done nothing wrong, and
`PANZURA wanted to move in another direction. The Board Members would not reveal who the
`next CEO would be. Before she left the meeting, CEO Stelfox told the PANZURA Board
`Members that Waldschmidt had been sleeping with a subordinate employee. Chereskin became
`angry and agitated, yelled at Stelfox, and told her to step out of the room.
`53.
`Stelfox joined PLAINTIFF in the room he was in, and told him she had just been
`fired. PLAINTIFF was stunned.
`54.
`PLAINTIFF and Stelfox then heard Chereskin screaming at someone on the phone
`for about 10 minutes. They gathered it was Waldschmidt. PANZURA Board Member
`Varavadekar and Ropes & Gray Attorney Matt Richards joined the conversation. Richards then
`left, and Varavadekar asked Stelfox to return.
`55.
`PANZURA Board members did not ask Stelfox any additional questions about the
`conduct she had reported. Chereskin told Stelfox they would continue with the plan to terminate
`her, as well as her family members who also worked at PANZURA, Steven Stelfox and Shelby
`Stelfox. Chereskin then asked Stelfox to send PLAINTIFF in to terminate him.
`56.
`Chereskin called PLAINTIFF in to the conference room and told him words to the
`effect of: “we just terminated Jill and her family. We're going to terminate you too.” PLAINTIFF
`was shocked, and asked why. Chereskin said: “it has nothing to do with your performance. We
`need to clean the slate for a new management team.” PLAINTIFF continued to express confusion
`and ask why, and PANZURA Board Members said words to the effect of: “we'll help you with a
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`FIRST AMENDED COMPLAINT
`McClure v. Panzura, LLC Case No. 5:24-cv-02966- EKL
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`reference, we'll help you find a new slot. This is not personal. You did a great job the last two
`years.”
`57.
`PLAINTIFF and Stelfox were instructed to leave their laptops at the Ropes & Gray
`office before leaving. Both Stelfox’s and PLAINTIFF’s devices were shut down and their access
`to PANZURA removed entirely immediately after they left Ropes office.
`58.
`The next morning, Stelfox and PLAINTIFF went to the Dallas office to remove
`their items from the premises, on instructions from Joel Clark, Panzura’s in-house counsel. When
`they arrived, they were met with two men they did not recognize carrying guns in an open and
`obvious fashion, along with Clark. These men, who PLAINTIFF and Stelfox would later learn
`were private investigators, approached PLAINTIFF’s car with PLAINTIFF’s and Stelfox’s
`belongings, and loaded those items into PLAINTIFF’s car. PLAINTIFF and Stelfox were denied
`access to the office. This experience was highly disconcerting, frightening, and humiliating.
`59.
`PLAINTIFF has learned that the Dallas offices of CEO Stelfox and PLAINTIFF
`were ransacked, with their walls taken apart, removing surveillance technology that Waldschmidt
`had installed in their private, personal spaces to spy on them during their employment.
`60.
`PANZURA also fired other individuals associated with PLAINTIFF and CEO
`Stelfox and the Stelfox family, for no work-related reason, including the recently-hired Head of
`Channel Sales, who had recommended that the Junior Female Employee be fired, and the former
`Executive Assistant to Shelby Stelfox.
`61.
`PANZURA then installed Dan Waldschmidt as the new CEO, which it announced
`via press release on January 24, 2024. PANZURA did this without investigating his misconduct,
`CEO Stelfox’s allegations, or taking any steps to make sure that its firing of Stelfox, PLAINTIFF,
`and those associated with them was not retaliation instigated by Waldschmidt.
`62. Waldschmidt, as CEO, has promoted the Junior Female Employee. PANZURA
`has continued to not investigate whether there is sexual harassment, breach of fiduciary duties,
`retaliation, or other legal violations associated with the firing of PLAINTIFF, Stelfox, and their
`associates.
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`12
`FIRST AMENDED COMPLAINT
`McClure v. Panzura, LLC Case No. 5:24-cv-02966- EKL
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`V.
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`EXHAUSTION OF ADMINISTRATIVE REMEDIES
`63. On March 13, 2024, PLAINTIFF filed a Charge (Charge # 556-2024-00590) with
`the EEOC and cross-filed with the California Civil Rights Division. On March 14, 2024,
`PLAINTIFF received a Right-to-Sue Notice from the EEOC and the California Civil Rights
`Division (“CRD”). Plaintiff’s EEOC Charge and Right to Sue Notices are attached to this
`Complaint as Exhibit B. The name of the Junior Female Employee in Plaintiff’s EEOC Charge has
`been redacted in the version attached here.
`VI. CAUSES OF ACTION
`
`FIRST CAUSE OF ACTION
`Whistleblower Retaliation
`In Violation of Cal. Labor Code § 1102.5
`(On Behalf of Plaintiff Against All Defendants)
`64.
`PLAINTIFF hereby realleges and incorporates by reference each of the foregoing
`allegations of this Complaint.
`65.
`Cal. Labor Code § 1102.5(a) prohibits retaliation against employees who disclose
`or may disclose information to a person with authority over the employee when the employee has
`reasonable cause to believe that the information discloses a violation of a federal or state statute or
`noncompliance with a federal, state, or local regulation.
`66.
`Cal. Labor Code §1102.5(b) prohibits retaliation against an employee because the
`employer believes the employee may disclose information about a violation of law to a person
`with authority over the employee.
`67.
`Cal. Labor Code §1102.5 also prohibits retaliation against an employee because of
`his association with someone protected by Labor Code section 1102.5. See Steele v. Youthful
`Offender Parole Bd., 162 Cal. App. 4th 1241, 1255 (2008).
`68.
`Cal. Labor Code §1102.5(c) prohibits retaliation against an employee for refusing
`to participate in an activity that would result in a violation of law.
`69.
`The facts set forth above establish that PLAINTIFF engaged in protected activity
`when he refused to engage in unlawful activity by, among other acts, refusing to alter the
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`McClure v. Panzura, LLC Case No. 5:24-cv-02966- EKL
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`commission pay of the Junior Female Employee so that she would receive greater compensation
`than her male peers.
`70.
`PLAINTIFF also engaged in protected activity when he provided information to
`CEO Stelfox that disclosed that the Junior Female Employee and Waldschmidt were misusing and
`misreporting company funds, Waldschmidt was using company funds to conduct an affair with a
`subordinate, Waldschmidt was attempting to give the Junior Female Employee a pay hike that
`could violate Equal Pay laws, and Waldschmidt was potentially using PANZURA perks and
`money to obtain sexual favors from a subordinate employee.
`71. During the December 2023 meetings, Waldschmidt became aware that PLAINTIFF
`and CEO Stelfox would not provide the illegal pay hike to the Junior Female Employee that he
`wanted, and he became aware that Stelfox and PLAINTIFF were aware of his activities with the
`Junior Female Employee. He was aware that PLAINTIFF was closely associated with Stelfox and
`that the two shared information. Waldschmidt believed that PLAINTIFF would continue to blow
`the whistle on his illegal conduct.
`72. Many of PLAINTIFF’s protected acts occurred in California, at PANZURA’s
`corporate headquarters.
`73. During the December 2023 meetings in California, Waldschmidt decided to get
`Stelfox removed as CEO, along with PLAINTIFF. The decision to