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Illumina Hit with $7.7 Million for Wrongful Termination Suit by Ex-CSO Anthony Czarnik

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Talk about bad timing. Just as Illumina decided to bring its new genotyping system out into the light of day, the company was shadowed by a dark cloud from its past: Co-founder and CSO Anthony Czarnik, who was terminated in fall 2000, won a jury verdict against the company in California Superior Court for wrongful termination.

In the wake of the verdict, Illumina said it was going to take a charge for $7.7 million in damages and litigation expenses on its second quarter balance sheet, but that it would appeal the verdict and would therefore not pay the damages immediately.

“We think the judgement was not reflective of the evidence in the case,” said Illumina CEO Jay Flatley. “The evidence was overwhelmingly in our favor that we treated this employee with the utmost respect … at every stage of the situation.”

Flatley attributed the verdict to a jury “more influenced by current events,” in particular the wave of corporate scandals that has enveloped the US recently, than by laws.

But Czarnik, who currently serves as chief scientific officer of Sensors for Medical Science in Germantown, Md., told BioArray News that the jury reached its unanimous verdict with little deliberation. “They didn’t even debate it. All 12 agreed that Illumina had acted with malice,” Czarnik said.

Czarnik added that he thought he would suffer career setbacks after filing the lawsuit, but that he had been pleasantly surprised by the number of people who have been supportive. “The people who run venture funds and the people who run startup companies are not a homogeneous group. Bad things happen and I haven’t found any negative reaction,” he said. “Most people congratulate me on having stood up for my rights.”

Czarnik’s current company is now seeking FDA approval of an implantable continuous glucose sensor, adding to his excitement and relief about landing his latest position, he said. “I tell my colleagues on an almost weekly basis now, how I appreciate working with such an upstanding group of people.”

— MMJ