Withers secures defense victory for Kraken following month-long trial

International law firm Withers secured a defense victory for cryptocurrency exchange Kraken on March 28, following a four-week trial in San Francisco Superior Court that centered around an ex-employee’s claims of wrongful termination.

The jury returned a complete defense verdict, finding that Payward, Inc. – which operates as Kraken – did not retaliate against the former employee for raising pay disparity concerns and, instead, properly terminated him for poor performance and misconduct.  

"Following four weeks of trial and several years of litigation, I’m grateful the jury reached the right conclusion,” said Withers partner Christopher LaVigne, Regional Division Leader for the firm’s U.S. Litigation Division. “Kraken has consistently stood on principle and defended against meritless whistleblower claims, while also seeking to protect its confidential information and trade secrets. This verdict confirms those efforts are worthwhile."

In addition to LaVigne, the Withers team was led by partner Kimberly Pallen and included senior associates Vahe Mesropyan and Jordan Garman and legal project manager Lalindra Sanichar.

“At Kraken, culture comes first. We hire, pay, and promote based on performance. In this case, we saw gross misconduct and countless frivolous motions from an ex-employee who wanted a payoff and lied in hopes we would fold. But we remained confident truth would prevail, and we were right,” said a spokesperson for Kraken. “We're pleased with the outcome and thankful to testimony from happy Kraken employees and advocacy from our counsel at Withers.”

The former employee claimed that he was fired in retaliation for raising concerns about pay disparities for two of his female direct reports, which he claimed were potential violations of the California Equal Pay Act. Kraken has consistently denied the claims as meritless and countersued, claiming the former employee violated his covenant of good faith and fair dealing by hiring unqualified employees – including his friends and former colleagues – and purposefully offering them salaries beyond the top of Kraken's pay scale for the roles at the time, without his supervisor's input or approval and by actively attempting to sabotage his supervisor.

The jury determined that the former employee's request for salary increases for his two direct reports was not a contributing factor in his termination. 

The jury also found the former employee breached his confidentiality agreement with the company and misappropriated company trade secrets by sending confidential company information outside the company without permission and by planning to download confidential company information to his own personal storage devices. Lastly, the jury found that the former employee breached his duties of good faith and fair dealing by not performing his work in the best interests of the company.