SAN FRANCISCO--(BUSINESS WIRE)--Zain Jaffer, co-founder and former Chief Executive Officer of mobile advertising company Vungle Inc., filed a wrongful termination lawsuit today against the Company for firing him in violation of California labor laws.
Vungle’s Board of Directors removed Jaffer as CEO – a position he held for nearly 7 years – in 2017 shortly after learning of his arrest by Sheriff’s deputies who had been called to his home following reports by family that he was unresponsive and acting bizarrely. At the time, Vungle issued a news release making clear that the firing was because of the arrest and was unrelated to job performance. The Company said the board had fired Mr. Jaffer within 24 hours of learning about his arrest record.
Following the incident, the District Attorney’s Office ultimately dismissed all charges and took the very unusual step of releasing a statement saying the facts did not support the case and that the incident resulted from Mr. Jaffer “being in a state of unconsciousness caused by prescription medication.”
A former Vungle board member publicly stated that she resigned from the board due to ethical concerns related to the way Mr. Jaffer was terminated, complaining that the board dismissed Jaffer “based on presumption of guilt” and ignoring that “we live in a democracy where [a] key legal right is presumption of innocence” and a defendant is innocent until proven guilty.
Jaffer’s lawsuit alleges that Vungle violated California Labor Code Section 432.7 which expressly prohibits employers from terminating employees because of an arrest that did not result in a conviction. He further claims that Vungle seized ownership of Company shares due him, amounting to tens of millions of dollars, and refused to pay substantial bonuses due him. Mr. Jaffer said Vungle has continued to disregard his rights as an employee and shareholder, forcing him to file the lawsuit to get the Company to follow the law.
“Once I was absolved of any wrongdoing, I was looking forward to a friendly relationship with the Company,” Mr. Jaffer said. “Instead, Vungle unfairly and unlawfully sought to destroy my career, blocked my efforts to sell my own shares or transfer shares to family members, and tried to prevent me from purchasing shares in the Company.”
Mr. Jaffer is represented by Louis “Chip” Edleson and Joann Rezzo of Edleson & Rezzo, a San Diego law firm that routinely represents high level executives in employment disputes. In a very similar case to Mr. Jaffer’s that involved a firing following an arrest on false domestic violence charges, they recently won an $18.6 million verdict against Allstate Insurance Co.
“The law is very clear: employers cannot fire employees because of an arrest that does not result in a conviction,” Ms. Rezzo said. “Vungle did exactly that, and then the Company announced what it had done to the press. With this clear supporting evidence, this is one of the strongest employment cases we have ever seen. And, based on Mr. Jaffer’s compensation package and loss of valuable stock, his case has the potential to be one of the largest cases ever for wrongful termination of employment.”
Mr. Jaffer founded Vungle in 2011. Under his leadership as CEO, the Company grew beyond $300 million in annual revenue, set up eight international offices, and hired 200+ employees. He was the largest shareholder of Vungle prior to the firing and remains the Company’s second-largest shareholder. However, he still retains the largest voting powers of any shareholder.