A former chief of staff of Rothenberg Ventures has brought a proposed class-action lawsuit against the beleaguered San Francisco-based investing outfit, saying it routinely failed to pay contract workers their final paycheck across its four-year history, and that it failed to compensate Fanelli and other hourly workers for overtime.
The suit, brought by Katie Fanelli, aims to address anyone who failed to receive final or overtime pay from Rothenberg Ventures Management Company and whose individual claims fall below $75,000. That isn’t an arbitrary distinction. Federal courts may hear suits only where “the matter in controversy exceeds the sum or value of $75,000,” while California law and statutes protect plaintiffs who are seeking less.
Fanelli’s suit employs both colorful prose — and some brow-raising accusations. Describing Rothenberg’s business practices as “lucrative, repressive, and unlawful,” it goes on to say that as part of a “systemic scheme of wage abuse,” Fanelli’s employment was terminated, after which Rothenberg Ventures failed to provide her with a final paycheck covering the hours she had worked in her final pay period.
The lawsuit seeks to represent “all California-based employees who worked any time during the four years preceding” the suit and who “were not paid their final paycheck upon separation and/or termination” from Rothenberg Ventures Management Company.
Fanelli is also accusing Rothenberg of not paying herself and others deserved overtime wages.
The suit observes that, according to California labor law, “any work in excess of eight hours in one weekday and any work in excess of 40 hours in any one workweek . . .shall be compensated at the rate of no less than one and one-half times the regular rate of pay for an employee.”
It goes on to state that she wasn’t provided additional pay for the extra hours worked, and it suggests her fellow co-workers weren’t either. It isn’t clear from the suit whether Fanelli believes this to be true throughout her employment with Rothenberg, periodically, or during the end of her tenure with the firm, which ended in August.
Rothenberg Ventures has found itself embroiled in controversy over the past several months, losing several key executives. Thirty-two-year-old founder Mike Rothenberg has been accused of several illicit activities, including allegedly harassing employees, taking out a $5 million loan over Christmas break without investor knowledge, and wiring himself a sizable salary from different entities.
Rothenberg is also under investigation by the SEC and could come under the watch of the FBI and U.S. Attorney General, according to one source TechCrunch has previously spoken with.
An investigation does not mean there’s been any wrongdoing. No formal charges have been brought against Rothenberg.
Fanelli isn’t the first employee to accuse Rothenberg of failing to pay her money owed. David Haase, a former employee who joined Rothenberg Ventures in April of this year and says he was tasked with “providing various services of a Chief Financial Office,” filed suit against the firm in late August, saying he was asked to run up more than $100,000 in business expenses on a personal American Express account and never repaid.
Numerous sources says other former staffers are similarly prepared to take on Rothenberg in court over back pay.
Fanelli and her lawyers filed the suit on September 30th.
In the state of California, an individual can sue on behalf of others in a group, or class, of absent parties. However, those included in the suit may choose to opt-out if they don’t wish to be involved.
While Rothenberg himself was not specifically named in the suit, Fanelli’s lawyer, John Glugowski, tells TechCrunch the names and entities of the defendants in the case are still being worked out.
Rothenberg Ventures recently rebranded as Frontier Tech Ventures in an effort to distance itself from its public unraveling. Rothenberg is the sole general partner of the firm, however, and for now, maintains control over the enterprise, its investments and management practices.
We reached out to Rothenberg earlier today; we hope to update this post with his comments.