Furloughed Bitwise workers file class action lawsuit against company over lost wages

Furloughed Bitwise workers have filed a class-action lawsuit against their employer alleging numerous labor violations, including failing to provide them advance notice of their furlough and issuing them checks that bounced.

The workers, more than 900 nationwide and 300 in Fresno, were given notice of their furlough on May 29 in the wake of a company board meeting in Oakland. The announcement came just ahead of public revelations the Fresno-based technology company was in deep financial trouble.

Roger Bonakdar, a Fresno attorney who represents the workers, called the company’s treatment of its employees “morally bankrupt.”

“There is no amount of perfume you can spray to make stealing people’s money and bouncing payroll checks smell better,” he said. There is no way to make wage theft excusable.”

Bonakdar alleges in the 24-page lawsuit that Bitwise violated several laws including the Worker Adjustment and Retraining Notification Act, a state law that requires companies give employees 60 days notice of furloughs and layoffs.

The lawsuit names as defendants Bitwise Industries, BW Industries, Alpha Works, along with co-founders Jake Soberal and Irma Olguin and board members Mitchell Kapor, Paula Pretlow, Ollen Douglass and Joseph Proietti.

Soberal and Olguin, who have since been fired by the board, did not return calls seeking comment Wednesday.

Ollen Douglass, a founding board member of the Motley Fool Foundation and a Bitwise board member since 2021, was appointed as the interim president of Bitwise.

Bonakdar said it is clear the company was trying to convince investors it was financially solvent when it really wasn’t. In March 2023, the co-founders stated that Bitwise had at least $80 million in the bank.

“Despite the amounts of money in the accounts, from March through May, Bitwise discontinued its direct payroll deposit and began to issue paper checks to its employees,” the lawsuit states. “Plaintiffs are informed and believe and thereupon allege that all 900 employees were written bad payroll checks which ultimately bounced.”

Bonakdar believes the company went to issuing paper checks as a way to hide the fact it was not making deductions to employee accounts, such as their 401Ks.

“The paper checks also didn’t tell employees what their gross pay was, there was no breakdown of what was withheld, or even hours worked,” he said. “People are out thousands of dollars.”

Other violations allege include unfair business practices, failure to pay wages, failure to maintain accurate records, failure to furnish wage statements, failure to pay timely wages, failure to pay minimum wages and negligence.

The workers are seeking certification of the class, along with financial damages and what they were owed under the WARN Act, including unpaid wages, accrued holiday pay, accrued vacation, and all other recoverable benefits for 60 days.