A hostile work environment marked by retaliatory behavior, financial secrecy and missed employee pay became the norm at supply chain tech company Slync.io, according to a new lawsuit from a former executive.
The legal filing comes as Slync faces mounting scrutiny around its now former CEO’s handling of company funds. Chris Kirchner was suspended from his position this week, the company’s vice president of global sales and marketing Burt White confirmed to Sourcing Journal Tuesday. Chief of staff Tim Kehoe is now acting president.
White declined to specify the reason for Kirchner’s suspension or address late and missed employee pay. Kirchner could not be reached for comment.
The company’s software platform automates backend logistics functions, such as documentation, invoicing and carrier management and has been used by companies such as Kuehne + Nagel and DHL Global Freight Forwarding.
The lawsuit, filed by former vice president of engineering Jason Selvidge, offers new light on the internal politics of the Goldman Sachs-backed firm.
Selvidge’s lawsuit, filed in San Francisco district court last week, names the company and Kirchner as defendants and accuses both of failure to pay minimum wages and to pay wages on time after his termination, unfair business practices, breach of contract and retaliatory behavior.
Selvidge alleges he was fired out of retaliation for speaking up about Kirchner’s alleged “unlawful conduct” and accused Kirchner of using the company “as a personal piggy bank,” while not paying staff, the complaint said.
Reports began to surface about the missed or late paycheck issues around May, when employee frustrations boiled over into social media and online forums. However, Selvidge began noticing the payroll problems close to the time he joined the company.
Three paychecks in a row were late between August and September of 2019, according to the complaint. That was followed by missed paychecks between January 2020 and March 2020.
Money issues were made known to the staff in late 2019 when they were informed by the former CEO that Slync was “running out of money,” the complaint alleges. The following year, in the spring, employees were then told Kirchner had found new funding.
It’s unclear who the investor could have been, or if the secured funds was a reference to the first round Paycheck Protection Program (PPP) loan the company received in April 2020 in the amount of $391,667. Selvidge’s lawsuit said Kirchner bought a Ferrari after the PPP loan came in.
The following year, when the company raised a $60 million Series B in February, Kirchner bought a jet and Kentucky real estate, the complaint said.
Goldman Sachs led the Series B, which also included ACME Ventures, 235 Capital Partners and Correlation Ventures among other investors. Goldman Sachs also got a seat on the board with the investment.
A Goldman Sachs spokesperson did not respond to a request for comment Tuesday.
Kirchner called the Series B a “great milestone” for Slync.
“For us, everything starts with our customers and more capital to invest in our global team, accelerate our product development and grow our service offerings is a big win for all of them,” Kirchner said in a statement at the time of the raise.
The company said at that time the capital would be pumped into expanding its footprint in Europe and Asia, along with bolstering its “team of world-class talent.”
Missed and late payments began not long after the raise, according to Selvidge’s filing.
“It would soon become apparent that the company was yet again out of money, despite the loans and other funding sources,” Selvidge said in his lawsuit.
When executives brought forth their concerns particularly on the payroll front, the complaint alleges, Kirchner either responded with apathy or retaliated.
A company-wide meeting Selvidge said he called on Kirchner to schedule to address the payroll issues was placed on the calendar two weeks later, “demonstrating the lack of priority or attention he was willing to give to these very serious problems,” the lawsuit said.
Kirchner used the meeting to inform employees of a six- to eight-month cash reserve, but didn’t speak to the missed and late paychecks.
“CFO [Samar] Kamdar also began complaining to investors that he believed Defendant Kirchner was misrepresenting the amount of annual revenue the company was making to investors by a factor of at least 30,” the complaint said.
Selvidge said he was told by Kamdar that as of May 27, 2022 Slync had $15,000 in operating funds and that Kirchner was the only one who had access to the company’s investment account with the complaint saying “Kamdar noted several additional inconsistencies in the company’s financial statements.”
However, when those financial reporting concerns were brought before the board, Kamdar was then fired by Kirchner, according to the lawsuit, and Kirchner told management, “he would fire anyone who would go directly to the board without following the chain of command.”
Selvidge went to the board June 5 to voice his own concerns about the payroll issues and his belief that the CFO was fired as a retaliatory move. He also urged the board to look into Kirchner’s attempt to buy the Derby County Football Club out of administration, a deal he ultimately failed to secure. Selvidge called Kirchner a “distracted and ultimately disinterested CEO” who was “flying around the world in his private jet to play golf, with supposed potential customers.” Selvidge said Kirchner was labeled a “ghost” by employees who rarely saw him.
It’s unclear if the board initiated an investigation into Kirchner after executives expressed their concerns.
The following day, Selvidge’s lawsuit alleges Kirchner held a meeting with executives without him during which time they were told Selvidge would be fired for going to the board, but that the termination would be blamed on a reorganization.
Selvidge claimed his access to email was cut off on June 14, with no explanation of why from Kirchner or human resources. Selvidge said he is still owed wages.
One of Selvidge’s attorneys, Chantal Payton of Los Angeles-based Payton Employment Law, said the executive is due $2 million at minimum. The total could be more once past and future lost wages, damage to career, emotional distress and other factors are assessed, Payton said.
“Remember, our client wasn’t the first to bring financial concerns to Slync’s attention,” Payton told Sourcing Journal. “CFO Samar Kamdar noted inconsistencies, reported them and was quickly fired. I think people were afraid of retaliation from Kirchner. Now that he’s been suspended, I anticipate others will begin to come forward with their concerns and take action to recover their unpaid wages and seek penalties that the California Labor Code entitles them to.”