Law360 is providing free access to its coronavirus coverage to make sure all members of the legal community have accurate information in this time of uncertainty and change. Use the form below to sign up for any of our weekly newsletters. Signing up for any of our section newsletters will opt you in to the weekly Coronavirus briefing.
Sign up for our Media & Entertainment newsletter
You must correct or enter the following before you can sign up:
Thank You!
Law360 (September 24, 2020, 10:34 PM EDT ) Grindr's former vice president of finance on Wednesday accused the dating app of firing her after she questioned a Paycheck Protection Program loan the company had received and that she believed violated Treasury Department guidelines.
In a complaint lodged in California state court, Jing He said she had been directed to apply for a PPP loan by one of the company's new owners. The money came through in late April, she said in her suit.
In early May, the U.S. Treasury Department updated its PPP qualification guidelines, clarifying that applicants must show that the loan is needed to support their ongoing operations, according to the suit. That was not the case at Grindr, Jing said, adding that the company was in no financial trouble and at no risk of having to lay off employees.
The company could have returned the loan that month without running into trouble with the federal government, and Jing said she urged the company's leadership to do so. The company refused and then fired her citing "poor performance," she alleged in Wednesday's suit.
Jing said she had previously received positive feedback on her work, adding that in her most recent performance evaluation, she earned the highest score of any member of the management team.
"Grindr's reasoning for firing [Jing] was a mere pretense," she said. "In reality, [Grindr] retaliated against plaintiff for disclosing information that plaintiff reasonably believed indicated Grindr had violated federal laws, rules and/or regulations in applying for, accepting and keeping the PPP loan."
Jing joined Grindr in June 2019. She was hired for her experience with initial public offerings, and she had previously worked as a financial adviser with Beijing Kunlun Tech Co. Ltd. during its acquisition of Grindr in 2016, according to the suit.
Earlier this year, Kunlun Tech sold Grindr to San Vicente Acquisition LLC for more than $600 million.
According to Jing, the trouble began in April, when one of San Vicente's owners requested that she and her team apply for a loan from the PPP. Those loans were intended to help small businesses avoid layoffs and furloughs during the COVID-19 pandemic, Jing noted. And Grindr was in no financial danger at the time, nor was there reason to believe it would need to fire anyone to make ends meet, she said.
Regardless, Grindr's PPP loan was funded later that month, she said.
After reading the new guidelines issued in May, Jing decided that Grindr didn't qualify for its PPP loan, she said. Fortunately, she learned that Grindr could return the loan without penalty by May 14, according to the complaint.
On May 12, Jing emailed Lu, telling him about her concerns and explaining the risks associated with not complying with federal law, according to the suit. But Lu told her Grindr would be keeping the money, she said.
Then, in July, Jing broached the issue at a finance committee meeting, telling Grindr's chief financial officer, Gary Hseuh, about Lu's instructions not to return the loan. The day after that meeting, Hseuh said he wanted to meet with Jing, according to the suit. She said she thought he wanted to further discuss her concerns that the company had violated federal law, but instead, she was fired for "poor performance."
Jing is alleging wrongful termination in violation of California's labor code and public policy. She's after unspecified damages, court costs and attorney fees.
Earlier this month, House Democrats questioned the Trump administration's oversight of the more than $500 billion in forgivable loans distributed through the PPP, citing thousands of loans with "indicia of fraud."
Democrats on the chamber's Select Subcommittee on the Coronavirus Crisis lamented the administration's plan to reserve audits for loans over $2 million, "leaving the other 99.4% of loans with little or no oversight." Staff members tallied nearly 11,000 loans worth over $1 billion in which companies appeared to receive multiple loans in violation of program rules, over 600 loans to companies blocked from federal contracts and hundreds more for applications missing basic data such as names and addresses.
Meanwhile, committee Republicans offered their own report titled "A Resounding Success," which defended implementation by the Trump administration and the private banks that have issued 5.2 million government-backed forgivable loans worth over $525 billion in the program meant to help small businesses survive pandemic shutdowns without laying off workers.
Grindr representatives and counsel for Jing did not immediately return requests for comment Thursday.
Jing is represented by Thomas J. Johnston and Brian F. Needelman of Johnston Hutchinson & Lira; and Seth Mitchell of the Law Offices of Scott Warmuth APC.
Counsel information for Grindr was not immediately available Thursday.
The case is Jing He v. Grindr LLC, case number 20STCV36699, in California Superior Court for Los Angeles County.
--Additional reporting by Andrew Kragie. Editing by Peter Rozovsky.
Update: The story has been updated with a case number.
For a reprint of this article, please contact reprints@law360.com.
