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California whistleblower accuses stem cell maker of retaliation

by | Jul 25, 2014 | Employee Rights

Los Angeles employers sometimes “shoot the messenger” when a worker reports unsafe, unethical or criminal internal business practices. It’s easier for some workers to remain silent and employed than risk getting demoted, transferred, harassed or fired for speaking up. Business misconduct is hard to ignore when an employer is defrauding the government or endangering the public.

A California man was fired from his position as a senior manufacturing executive for StemCells Inc., after working at the firm just a few months. Soon after the Santa Clara man was hired in December, he noticed unsterile conditions in the handling of stem cells cultures used in human clinical trials. The worker said his internal complaints about dangerous product defects and substandard processing practices created a backlash that ended with his firing in May.

The biotech employee’s upper management supervisor apparently got angry with the worker rather than express concern over the discovery of stem cell manufacturing flaws. Courthouse News Service reported the executive was ordered to keep the findings about potential patient risks hidden. Not long after the complaint, the worker was suspended and, within a few weeks, fired.

The unemployed manager recently filed an employment claim against StemCells, including a request for punitive damages, alleging the suspension and termination were wrongful and retaliatory. The man also charged the company with California False Claims Act violations – StemCells is a publicly-traded business with substantial government funding.

A representative of StemCells responded to the retaliation lawsuit. The company claimed the former manager’s charges were baseless. The firm stated the senior manufacturing executive was fired for poor performance and that no clinical trial patients had been harmed by StemCells products.

California workers who know or have good reason to believe a company is engaged in financial or safety violations have whistleblower protection. Whistleblower laws protect the rights of workers who report the activities to sources outside the company.

Source: CBS SF Bay Area, “Santa Clara Whistleblower Sues Newark Stem Cell Company That Fired Him” Jul. 18, 2014

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