Whistleblower or Monster? Jurors Will Decide

SAN FRANCISCO (CN) – Bio-Rad Technologies’ former general counsel Sanford “Sandy” Wadler was painted as both whistleblower and monster during opening arguments at a trial over the research company’s seemingly abrupt decision to fire Wadler in 2013, after he reported misconduct and a possible bribery cover-up in China.

“Even if somebody is a legitimate whistleblower, and Mr. Wadler is not, they can be fired if they are misbehaving or misperforming in the workplace,” Bio-Rad attorney John Potter said Tuesday. “They can be fired for other reasons. Bio-Rad had its reasons.”

One of those reasons was Wadler’s increasingly unruly and quarrelsome behavior.

“He’s had screaming fits in the office; evidence will show he pounded his table and shook his fist at his colleagues,” Potter said. “He scared people. The company actually conducted a Wadler threat assessment based on his outbursts. He had become a different person.”

Wadler sued Bio-Rad and CEO Norman Schwartz in May 2015, claiming he was suddenly fired after raising bribery concerns and other possible violations of the Foreign Corrupt Practices Act with the company’s audit committee in February 2013.

Wadler’s lawyer James Wagstaffe showed the jury a memo written by Wadler that said, “I have now become aware of what I believe to be series and prolonged violations of the FCPA in Bio-Rads’s business in China.”

According to Wadler’s lawsuit, in 2012 he found documents showing potential kickbacks that Bio-Rad paid to Chinese government entities, such as public universities, and that Bio-Rad was delivering products to Chinese customers without billing them.

His memo said, “My second conclusion is that because the evidence of the violations are so clear we have a duty to report these suspicions to the government agencies immediately and to our auditors Ernst & Young.”

As Wadler pushed for a more forceful investigation, Bio-Rad allowed Wadler to hire outside law firm Steptoe and Johnson to look into the matter. But the firm couldn’t find evidence of any actual wrongdoing.

“We may never know if there was any bribery wrongdoing or corruption because the investigators did not ask the necessary questions,” Wagstaffe said. “Bio-Rad decided to fire Mr. Wadler before the investigation was even over.”

He added, “Bio-Rad will say that he raised his voice, he yelled at everybody, and that he was a monster in the way he dealt with people. He yelled once in 2013 about the inability to get the documentation from China.”

Wagstaffe told the jury of five women and four men on Tuesday that Wadler had just been given a glowing performance review in December 2012, and that Schwartz slipped a backdated negative review into his file shortly after firing him.

“Bio-Rad and Schwartz had no intention of firing Mr. Wadler before he sounded the alarm to the audit committee of illegal activity,” Wagstaffe said, noting that Schwartz told the Department of Labor that Wadler’s report contributed to his firing.

But Potter said Wadler was simply underperforming. In the 26 years that Wadler served as Bio-Rad’s highest ranking in-house lawyer, he became complacent and failed to grow professionally. Potter said Wadler’s failure to institute a Foreign Corrupt Practices Act compliance program resulted in a $55 million fine.

“Sandy Wadler was asleep at the switch,” Potter said.

To hide his shortcomings, Wadler began aggressively pursuing possible Foreign Corrupt Practices Act violations in China, though he was never able to uncover the necessary documentary evidence.

“Mr. Wadler decided to reinvent himself; To go from an FCPA slacker to an FCPA whistleblower,” he said.

This, along with Wadler’s increasing unpredictability, led to his termination.

“Given the absence of evidence or his ability to articulate an FCPA case, this is looking like a setup,” Potter said.

Wadler is seeking at least $8 million in lost wages and benefits, since he has been unable to find a new job, and an unspecified amount in punitive damages. The trial is expected to last through early February.