**Updated 8:45 p.m.
After a jury in Suffolk County, MA, awarded almost $500,000 in missing wages and benefits to a doctor who said Fisk Johnson never paid him for three years of work researching cancer-fighting drugs and processes, Johnson released a statement saying he plans to appeal.
KJC Law Firm in Boston announced Friday that its client, Dr. Andrew Segel, was awarded $413,912.20 in unpaid wages and benefits after he worked for three years running Genitrix, a start-up research firm that Johnson and Stephen Rose funded. Rose is the managing director of Fisk Ventures, Johnson’s venture capital company.
Johnson is planning to file an appeal, saying the jury’s decision is a bad sign for anyone in Massachusetts who wants to start their own business because it holds investors responsible for the CEO’s salary when the company fails.
“Fisk Johnson intends to appeal the jury’s finding and believes they misconstrued the meaning of the Massachusetts Wage Act. There is a further evidentiary phase of the trial to be completed before a judgment is entered,” the statement reads. “Fisk Johnson believes this is a miscarriage of justice. If the verdict stands, it should raise serious concerns for anyone investing in start-up or struggling companies in Massachusetts.”
Segel was born with cerebral palsy but grew up to graduate from both Harvard University and B.U. Medical School. After completing his residency at Mass General Hospital, he moved onto a fellowship at MIT. It was during his MIT fellowship that he developed “certain processes” that could have helped in the fight against cancer, the announcement continues.
While Segel was working on these processes, he agreed to give up his patents and the rights to future patents in exchange for Johnson and Rose funding the business. At some point, there were some issues and Segel filed for dissolution; Fisk Ventures reportedly purchased Segel’s patents, both current and future, but Segel got nothing.
But Johnson says that Segel was never his employee and that Fisk Ventures was just one of many investors in Genitrix. Further, when the business started to fail, Johnson says he was not obligated to keep investing money, and Segel made the decision to not pay himself.
“Fisk Johnson is profoundly disappointed in the incorrect claim that Andrew Segal was his employee. Fisk Ventures LLC was one of a number of investors in a start-up company, Genitrix, LLC. Dr. Segal, who also had a significant equity holding in Genitrix, was its CEO and President,” the statement reads. “Fisk Johnson believes Fisk Ventures, as an outside investor that did not control Genitrix, had no legal obligation to make further investments in Genitrix LLC when it experienced financial problems … when Genitrix began having financial trouble, it was Dr. Segal, who was the sole officer of Genitrix, that decided to not pay himself.”
Because Massachusetts has a mandatory law that triples awards and includes interest, Segel actually stands to collect over $1.3 million plus an additional $868,000 in punitive damages. A separate trial will determine if punitive damages apply.
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