Whistleblower Sues Playboy for Wrongful Termination

Oct 2, 2012 7:45 AM PST

LOS ANGELES — Former Playboy Enterprises controller and ex-senior vice president Catherine A. Zulfer is suing the company for wrongful termination, claiming she was fired for not pushing through $1 million executive bonuses without board approval.

Zulfer claims she was laid off after refusing to take part in the embezzlement scheme hatched by CEO Scott Flanders and CFO Christoph Placher in October 2010.

Neither executive is named as a defendant in Zulfer's complaint against Playboy.

The suit maintains that Playboy violated the California Whistleblower Act and was filed in U.S. District, Central District last week. Zulfer, 56, also alleges that she was terminated because of her age and a company policy of canning employees there for more than 10 years.

Zulfer also sates that she was frozen out of meetings and was forced to take on an extraordinary workload after the company downsized while still in Chicago.

The 24-year Playboy veteran was fired on Dec. 31, 2011 after refusing a second request to dole out unwarranted bonuses in January 2011. At that time she blew the whistle on the scheme and reported what she saw as shady accounting practices to Playboy’s general counsel and the Securities and Exchange Commission (SEC).

The lawsuit does not report if the SEC responded to Zulfer’s allegations.

"She was extremely concerned that CFO Pachler and/or CEO [Scott] Flanders were attempting to effectively embezzle, steal or convert Playboy assets," Zulfer states in the 20-page complaint. "In the least, plaintiff reasonably believed that approving or paying bonuses without board approval would be dishonest to shareholders and violate Playboy governance and GAAP (generally accepted accounting principles)."

Most of the money was earmarked for Flanders and Pachler, Zulfer alleges.

According to Courthouse News Zulfer called Playboy’s action a “retaliation” against her.

Zulfer seeks punitive damages, reinstatement or front pay, and an injunction. She is represented by David deRubertis of Studio City, Calif.

Playboy was contacted by XBIZ for comment but did not respond by post time.

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