Champion Sues Former Executives; Alleges Wrongful Hiring Practices

Champion Windows Inc., headquartered in Houston, filed a petition and application for writ of attachment in the amount of $5 million and for Injunctive Relief in the Harris County (Texas) District Court against Ralph Zuckerberg, former president/CEO, and Patrick M. Cahill, former chief financial officer (CFO), alleging that they participated in wrongful hiring practices, while working at the company.

According to court documents, Zuckerberg served as Champion’s president and CEO from 1980 to 2008. He “directly oversaw all of Champion’s operations including, but not limited to manufacturing, sales, marketing, accounting and … personnel.” Cahill served as CFO from 2001 to 2008 and was responsible for human resources and payroll. Champion alleges that “all Champion personnel with hiring and firing responsibilities reported directly to Cahill.”

Champion also alleges that “Defendants failed to ensure that hiring at Champion was performed by qualified personnel,” and, as a result “by 2006 a vast majority of Champion’s production employees were not legally authorized to work in the United States.”

“In the course of carrying out their responsibilities, Defendants instituted and oversaw hiring policies with negligent disregard for whether job applicants at Champion were legally authorized to work in the United States,” writes Champion in the complaint. “Defendants and the employees operating under their direction, failed to take reasonably prudent actions to verify the authenticity of the proffered documentation of the legal status of potential or existing employees.”

"Defendants and the employees operating under their direction, failed to take reasonably prudent actions to verify the authenticity of the proffered documentation of the legal status of potential or existing employees."

Both Zuckerberg and Cahill resigned from Champion in February and May 2008, respectively, according to court documents.

In November 2010, Champion officials say the company was served with a federal grand jury subpoena by the U.S. Immigration and Customs Enforcement (ICE) Agency “requiring the production of documents relating to Champion’s employment records, including payroll records and I-9 forms.” According to the complaint, Champion believed it was and had been in compliance with applicable laws, but, “the subsequent investigation conducted by ICE and the Department of Justice, however, revealed that a substantial portion of Champion’s employees were not legally authorized to work in the United States …. The results of the Government investigation demonstrated that the unauthorized nature of Champion’s workforce was a direct result of Defendants’ wrongful hiring policies and practices.”

According to court documents, Champion is seeking “to recover all actual damages caused by Defendants’ wrongful actions and disgorgement of all profits and benefits they received during their employments at Champion.”

Champion is seeking a writ of attachment in the amount of $5 million “to preserve [its] opportunity to collect on any judgment ultimately rendered in its favor,” according to the documents. Likewise, the petition says “Because Champion is unable to determine the amount of assets currently residing in Zuckerberg’s financial accounts that will be subject to the writ of attachment, Champion also seeks a temporary restraining order and temporary injunction to prevent Zuckerberg from transferring his assets, except to pay for normal customary expenses.” In this matter, the compliant alleges that after leaving Champion in 2008, Zuckerberg moved to Costa Rica, married a Costa Rican woman and continues to own a home there. “While Champion believes Zuckerberg is currently residing in the United States, he has the ability and inclination to move back to Costa Rica and/or transfer assets there, without notice,” the petition claims, and adds, “Champion requests the Court to promptly enter a temporary restraining order, to be followed by a temporary injunction, enjoining Zuckerberg, his agents and representatives … from taking any action to withdraw, remove or otherwise transfer or liquidate any funds, securities or any other assets of whatever nature except as necessary to pay normal, customary business and living expenses, without Champion’s express, written consent or the written authorization of the court.”

On October 25, however, an order was issued dissolving the restraining order and releasing the bond.

DWM
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