© 2024 KVPR | Valley Public Radio - White Ash Broadcasting, Inc. :: 89.3 Fresno / 89.1 Bakersfield
89.3 Fresno | 89.1 Bakersfield
Play Live Radio
Next Up:
0:00 0:00
Available On Air Stations

Bitwise Industries now faces a class action lawsuit after furloughs, financial issues

Bitwise Industries

FRESNO, Calif. – A week after Bitwise Industries announced it was furloughing its entire workforce, employees in the Fresno area have filed a class action lawsuit against the tech company.

The lawsuit is on behalf of more than 100 furloughed workers, according to the attorney on the case, Roger Bonakdar.

The lawsuit, filed Wednesday at the Fresno County Superior Court, names Bitwise Industries, BW Industries and Alpha Works, along with co-founders Jake Soberal and Irma Olguin and board members Mitchell Kapor, Paula Pretlow, Ollen Douglass and Joseph Proietti as the defendants on the case.

The 24-page complaint alleges that Bitwise violated the Worker Adjustment and Retraining Notification (WARN) Act, which requires employers to notify workers at least 60 days ahead of mass layoffs.

The main claims are that workers were not provided written notices of their furloughed status, and that the company failed to notify the Economic Development Department and the City of Fresno – which Mayor Jerry Dyer confirmed in a letter addressed to Bitwise.

The lawsuit can be found on the Fresno County Superior Court website.

Bonakdar believes that despite placing workers on furlough, Bitwise had no plans to bring employees back to work.

“My conclusions are based on actions,” he says. “We can judge what Bitwise’s intentions were based on undeniable realities.”

According to Bonakdar, some of those realities include reports about the company changing payouts from electronic deposits to paper checks, withholding pay stubs and instating immediate terminations.

The lawsuit also outlines instances of bounced paychecks, wage theft and failure to provide employee benefits during the furlough period.

Bonakdar believes the violation of the WARN Act is clear.

“We’re pursuing this from every angle and leaving no option unexplored,” Bonakdar says. “We are going to make every effort to recover what these folks are entitled to under the law.”

The Bitwise Board of Directors did not respond to KVPR’s request for comment.

Bitwise fallout continues

Following the lawsuit’s filing, the Fresno City Council voted unanimously to sever a contract with Bitwise. In October, the city had givena million-dollar grant to the company to help small businesses in the area connect to digital tools.

The city had already given about half that amount to Bitwise, but now plans to take back the remaining funds. It now plans to use the remaining funds for projects in the downtown area.

The loss of the contract only adds to Bitwise’s reported financial fallout. The company had reportedly failed to pay property taxes on its South Stadium location on Van Ness Ave, and listed some of its properties in Fresno and Bakersfield for sale.

In a statement to the Bee, former co-CEO Jake Soberal said the company was growing at an extreme velocity that “depend[ed] on a meaningful number of [venture] transactions, revenue, debt and equity closing.”

This story is part of the Central Valley News Collaborative, which is supported by the Central Valley Community Foundation with technology and training support by Microsoft Corp.

Esther Quintanilla reports on diverse communities for KVPR through the Central Valley News Collaborative, which includes The Fresno Bee, Vida en el Valle, KVPR and Radio Bilingüe.