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Hologic Sued Over Alleged Improper Accounting Practices

NEW YORK (GenomeWeb) — A former Hologic employee has sued the company for allegedly firing her after she reported potentially illegal accounting practices, including the alteration of accounting figures to show a higher profit margin for the company's US operations, according to court documents obtained by GenomeWeb.

The lawsuit, which was filed late last month in California Superior Court in San Diego County, charges that the employee became the target of a "campaign of harassment" when she brought her concerns to Hologic management and was eventually terminated despite a record of satisfactory performance at the firm.

The plaintiff in the case, Karmen Smiley, had previously worked in the accounting department of Gen-Probe and continued her employment when the company was acquired by Hologic in 2012 for $3.8 billion, receiving satisfactory performance reviews as recently as 2014, she said in her suit.

Around early 2015, Smiley began to witness what she believed to be violations of state and federal law by her superiors in the accounting department, which she communicated to an unnamed finance manager, the suit alleges. Potential violations included management ordering her to reclassify $3.4 million of domestic costs to various Hologic locations in Europe as part of an effort to improve domestic profit margins, it noted.

In response to her actions, the company created a hostile work environment for Smiley and, around the end of July 2015, ended her employment with the firm, according to the suit. As a result, Smiley has "lost income, employment, and career opportunities, and has suffered other economic damages," it added.

Smiley's lawsuit cites California labor code barring the discharge or disciplining of employees who refuse to engage in illegal activity or who report such activity to authorities, and charges that Hologic's actions are in direct violation of this law.

Smiley is seeking an undisclosed amount for back play, loss of future wages, emotional distress, attorney's fees, and punitive damages.

A Hologic spokesperson told GenomeWeb that the company believes the allegations are untrue and that it is defending itself vigorously. He added that Hologic conducted an independent investigation of the claims and "found them to be without merit."

Hologic also stated in a document filed with the court in late January that the plaintiff's lawsuit is in violation of an agreement with the company that requires all employment-related claims be submitted to final and binding arbitration, and that Smiley's firing was due to "legitimate, non-retaliatory reasons."

Earlier this week, the court set procedural timelines for the case, including ordering a mandatory settlement conference scheduled for Sept. 15.