The tech CEO who fired 900 employees over Zoom — prompting a massive backlash and an internal reshuffling — has been sued by a former executive who alleges that he repeatedly duped investors before and after the controversy.
Sarah Pierce, an executive vice president at Better.com until February, filed the lawsuit in the U.S. District Court in the Southern District of New York Tuesday alleging that the online mortgage lender’s CEO Vishal Garg repeatedly made “misleading statements … regarding the company’s financial prospects and performance” and retaliated against her when she brought her concerns to other executives.
Among the missteps Garg allegedly made, according to the lawsuit: He reportedly “misstated and exaggerated the Company’s ‘organic traffic revenue,’” “ignored internal projections” for Better.com’s profitability and defamed employees during the viral incident, claiming that laid-off employees were “stealing” from the company.
For a quick refresher of that fiasco, Garg laid off 900 — nearly 9% — of the Better.com staff on a Zoom call, then proceeded to disparage many of them on Blind, an anonymous job forum. Past reports have also painted Garg as confrontational and threatening; he once reportedly threatened to staple his former Better.com business partner to a wall and burn him alive.
One of the especially baffling pieces of the lawsuit: Months before Garg’s Zoom layoffs, he “directed Pierce and other company executives to hire hundreds of additional personnel” despite concerns about rising interest rates and the fast-shifting market.
Garg “overruled Pierce,” claiming that the company’s sales “would increase because ‘President Biden will die of COVID,’” consequently causing interest rates to fall and “save the Company from its worsening financial condition.”
Pierce, who, according to the lawsuit, was “the functional equivalent of Chief Operating Officer” at Better.com, raised these concerns with multiple executives and the company’s counsel shortly after the scandal that brought Garg and his company viral notoriety. She was especially concerned about Garg’s “misinformation” after the incident.
But she reportedly faced retaliation for this, the lawsuit alleges. She was put on an “unexplained leave of absence” from the company in early January — and just a week later, received notice of a resignation “she did not tender.” Her employment was terminated in February, just a month after her leave of absence, “without reason, severance or benefits,” the lawsuit alleged. She had been at the company for nearly six years.
A lawyer representing Better.com told SFGATE in a statement Wednesday that Pierce’s claims are “without merit.”
“The company is confident in our financial and accounting practices, and we will vigorously defend this lawsuit,” the company lawyer said in the statement.
Garg was reinstated as CEO in January after taking a leave of absence following the viral incident, which led to mass departures of multiple executives, including the company’s head of communications. Better.com has offices in Oakland.
