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«UNITED STATES DISTRICT COURT DISTRICT OF COLORADO Case No. 10-cv-02853-CMA-MJW PAUL GALLOWAY, Plaintiff v. FLEXSTAR TECHNOLOGY, INC., ANTHONY LAVIA, ...»

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 1 of 13

UNITED STATES DISTRICT COURT

DISTRICT OF COLORADO

Case No. 10-cv-02853-CMA-MJW

PAUL GALLOWAY,

Plaintiff

v.

FLEXSTAR TECHNOLOGY, INC.,

ANTHONY LAVIA, MARK MEYER, TIM BECK,

HAROLD ROBINSON, AND JOEL RUSS,

Defendants

AMENDED COMPLAINT AND JURY DEMAND

Plaintiff Paul Galloway, by and through his undersigned attorneys, McNamara

Roseman & Kazmierski LLP, and Sanford Wittels & Heisler, LLP, hereby alleges the following:

OVERVIEW OF FLEXSTAR DEFENDANTS’ WRONGFUL CONDUCT

1. This is a case about witness retaliation. Defendant Flexstar Technology, Inc. (“Flexstar” or the “Company”) conspired with its CEO, Board of Directors and Vice Presidents (collectively “Defendants”) to fire Plaintiff Paul Galloway, one of Flexstar’s senior management employees, because he provided testimony in a lawsuit pending in United States District Court.

2. This democracy-subversive act must not be allowed to stand. It violates the protections of 42 U.S.C. § 1985(2) which safeguards the rights of individuals to speak freely before courts without fear of retribution from anyone, including their employer.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 2 of 13

3. Defendants’ actions also violate COLO. REV. STAT. § 8-2.5-101(1)(a) and Colorado common law which make it unlawful for an employer to take any action against its employees for testifying before a court of law, and provide damage remedies to employees who have been victimized by such retaliation.

4. In late November 2009, Plaintiff Paul Galloway provided a sworn affidavit in an ongoing federal civil lawsuit in the U.S. District Court for the Southern District of New York describing wrongful conduct by Seagate Technology, LLC (“Seagate”), his former employer, concerning its development of computer disk drive technology.

5. Later that month, Mr. Galloway accepted an offer of employment from Defendant Flexstar, made personally by Flexstar’s CEO, Defendant Anthony Lavia. Defendant Flexstar’s largest customer is Seagate, against whom Mr. Galloway provided the sworn testimony.

6. Soon after signing the employment contract with Flexstar, the substance of Mr. Galloway’s affidavit against Seagate was reported in the New York Times and other national media outlets and described his claims about Seagate’s misappropriation of technology owned by another company, called Convolve, Inc. (“Convolve”).

7. When they learned about Mr. Galloway’s affidavit, Defendant Lavia and Flexstar’s Board of Directors and officers conspired with the company to fire Galloway in retaliation for his testimony against Seagate, Flexstar’s largest customer.

–  –  –

condone the acts of Defendants would set a dangerous precedent, placing any employee who dares speak the truth in a court of law at risk of losing his job.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 3 of 13

–  –  –

compensate him for his lost wages, humiliation, embarrassment, stress, mental anguish, and pain and suffering caused by their actions, as well as an award of punitive damages.

–  –  –

U.S.C. § 1331 because it raises a federal question under 42 U.S.C. § 1985(2). This Court has supplemental jurisdiction over Plaintiffs’ related state law claims pursuant to 28 U.S.C. § 1367 because they form part of the same case or controversy as his federal claims.

–  –  –

corporation with its principal office at 47323 Warm Springs Boulevard, Fremont, California

94539. Flexstar’s Research and Development Center is located in Longmont, Colorado.

–  –  –

President of Sales of Flexstar. He is currently employed by LSI.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 4 of 13

–  –  –

pertinent to this action, Robinson was a member of Flexstar’s Board of Directors. He is currently a Managing Partner of Rigel Associates, LLC, a private investment firm that acquired Flexstar in conjunction with Audax Management Company, LLC in 2006.

–  –  –

action, Russ was a member of Flexstar’s Board of Directors. Upon information and belief, he is a former Managing Director of Audax Management Company, LLC, a private investment firm that acquired Flexstar in conjunction with Rigel Associates in 2006.

–  –  –

an engineer at Seagate Technology, LLC (“Seagate”). Upon information and belief, Seagate is the world’s largest manufacturer of computer disk drive and storage solutions.

–  –  –

became involved in a federal lawsuit with Convolve, Inc. (“Convolve”) and the Massachusetts Institute of Technology (“MIT”). In that suit Convolve and MIT alleged that Seagate misappropriated their computer hard drive technology related to noise and vibration reduction.





The action, Convolve, Inc. and Massachusetts Institute of Technology v. Compaq Computer Corp. and Seagate Technology, LLC, 00-CV-5141 (the “Seagate Action”), is filed in the United States District Court for the Southern District of New York and is currently ongoing.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 5 of 13

–  –  –

Galloway began discussions with Defendant Anthony Lavia, the CEO of Defendant Flexstar, about potential employment opportunities with Flexstar. The conversations between Mr.

Galloway and Defendant Lavia continued through the year by telephone and in-person meetings.

–  –  –

manufacturers and is a vendor to Seagate. Mr. Galloway was familiar with Flexstar and had a business relationship with Defendant Lavia because he worked with Flexstar’s products as a Seagate engineer.

–  –  –

Action regarding Seagate’s development of disk drive sound and vibration reduction technology during the time that he was with the company. Specifically, Mr. Galloway testified about meetings between Seagate and Convolve in which Convolve shared information regarding its sound and vibration reduction technology with Seagate. In the affidavit, Mr. Galloway states that Seagate later wrongfully failed to disclose evidence of its reliance on Convolve’s technology in developing its own products.

–  –  –

continued discussions with Mr. Galloway, specifically about his joining Flexstar as the new Director of Engineering in its Longmont, Colorado Research and Development Center.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 6 of 13

–  –  –

with Flexstar. The contract states that Galloway would earn a yearly salary of $130,000 and begin work on January 4, 2010.

Flexstar Retaliates Against Galloway for HisTestimony in the Seagate Action

–  –  –

him that the New York Times had published an article disclosing that Mr. Galloway provided a sworn affidavit against Seagate in the Seagate Action. Defendant Lavia responded that he would discuss the matter with Flexstar’s Board of Directors.

–  –  –

several individuals, including Defendants Meyer, Beck, and Robinson, a link from www.electronista.com to an article concerning the Convolve litigation. He also e-mailed Defendant Russ a link to an article on www.nytimes.com concerning the Convolve litigation and identifying the “whistleblower mentioned in this NY Times article” as “Paul Galloway – the ‘Kimito-like’ resource that I spoke to you about, and that had extended a job offer.”

–  –  –

regarding Mr. Galloway’s involvement in the Convolve litigation. Defendant Meyer expressed Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 7 of 13 the view that employing Galloway “would absolutely never work and that supporting Galloway in any way would damage Flexstar’s business relationship with Seagate.”

–  –  –

about Mr. Galloway’s employment with Flexstar. Together, they decided to terminate Mr.

Galloway’s employment because of his role as a witness in the Convolve litigation.

–  –  –

Galloway by telephone that he discussed the news articles about the affidavit with Flexstar’s Board of Directors, and that together they decided to terminate Mr. Galloway. Defendant Lavia explained that Seagate was Flexstar’s largest customer and that Mr. Galloway’s affidavit would impact business between the two companies if Mr. Galloway worked for Flexstar after having testified against Seagate.

–  –  –

falsely stating that Flexstar was “accepting [Mr. Galloway’s] proposal to withdraw [his] acceptance of our employment offer.” Stunned by this misrepresentation, Mr. Galloway asked Flexstar to clarify in writing that it was Flexstar, and not him, that was breaking the employment Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 8 of 13 agreement. Mr. Galloway confirmed that he intended to abide by the agreement and work for Flexstar and that he had only notified the company of the Times article because he believed Flexstar, as his new employer, should be aware of the matter. In response to Mr. Galloway’s request, Defendant Flexstar agreed that it was the company, and not Mr. Galloway, which was terminating Mr. Galloway’s employment agreement.

–  –  –

Flexstar’s attorneys confirmed that Flexstar had unilaterally abrogated the employment agreement because of Mr. Galloway’s affidavit against Seagate.

–  –  –

its violation of federal and Colorado state law, Mr. Galloway has suffered financially, been unable to secure other employment, and has endured emotional distress.

–  –  –

retaliation for his testimony against its largest customer, Seagate, in an ongoing legal proceeding in the U.S. District Court for the Southern District of New York.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 9 of 13

–  –  –

Defendant Anthony Lavia, in agreement with members of Defendant Flexstar’s Board of Directors and officers of Flexstar, including Defendants Russ, Robinson, Meyer and Beck.

–  –  –

retaliation for his testimony against its largest customer, Seagate, in an ongoing legal proceeding in the U.S. District Court for the Southern District of New York.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 10 of 13

–  –  –

Galloway was made by Flexstar’s CEO, Defendant Anthony Lavia, in agreement with members of Defendant Flexstar’s Board of Directors, and upon information and belief, officers of Flexstar.

–  –  –

which makes it “unlawful for any person to…take any action against its employees…for, testifying before a…court of law…at the request of such…court.”

–  –  –

violation of public policy because he performed this important job-related right or privilege.

Galloway, as Flexstar’s CEO, jointly and with others, made the decision to terminate Galloway’s employment.

Case 1:10-cv-02853-CMA-MJW Document 41 Filed 07/26/11 USDC Colorado Page 11 of 13

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