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NY apparel exec fired after raising alarms over PPE price gouging: suit

By
Alexandra Steigrad
Published Nov. 19, 2020, 6:05 p.m. ET

The boss of a New York apparel company that’s backed by several current and former NFL players axed an executive after she raised alarms over his plans to sell PPE gear at inflated prices during the COVID-19 pandemic, an explosive new lawsuit claims.

Looking to cash in on surging demand in March, Careandwear chief executive Chaitenya Razdan failed to ensure that medical gear like masks, gowns, gloves that the company was selling to US hospitals and frontline health care workers complied with state or federal regulations, according to the suit filed in New York state court on Thursday.

The fired exec Susan Jones co-founded the Seventh Avenue firm with Razdan in 2014 to design and sell specialty apparel for people dealing with cancer or other illnesses that require long-term intravenous medication, the suit said. That includes clothing with access flaps for IVs, allowing patients to keep their shirts or pants on for their treatments.

The company was so successful by 2016 that it attracted an investment from Humble Lukanga, a well-known Los Angeles financial advisor, along with several current and former NFL players, court papers said.

Among the latter were Darius Slay and Malik Jackson of the Philadelphia Eagles, Duane Brown and Bobby Wagner of the Seattle Seahawks, Sherrick McManis of the Chicago Bears, and former and pro football greats Arian Foster and Jonathan Grimes.

Along with Razdan, Lukanga, a board member, is also named in the suit for not stepping in to stop the CEO’s “unlawful” and “reckless attempts to take advantage of” the global health crisis — despite being aware of his actions.

Razdan and Lukanga could not be reached for comment. Careandwear, which is also named in the lawsuit, did not return requests for comment.

The lawsuit likewise claims that “in order to line his own pockets and those of his friends, Mr. Razdan provided millions of dollars of excessive commissions to his friends and acquaintances.”

According to the suit, Jones began raising concerns to Razdan and Lukanga, and asking for proof that the company’s business conduct was kosher. She claims she had been slowly pushed out of the power center of the company since 2017. Jones said Razdan stopped sharing important financial information with her, and eventually cut off her access to all company bank accounts. On June 29, Jones was fired, the suit says.

In addition to wrongful termination and breach of fiduciary duty, the former exec is claiming gender harassment and a hostile work environment. The suit claims Razdan created a “culture” where Jones and other women felt “uncomfortable with his behavior” but were “afraid” to challenge him, the suit said.

This included the CEO making comments on female employees’ physical appearance. Court papers cite an instance with an unnamed female employee in her 20’s who told Razdan she was planning to exercise after work.

The CEO responded, in front of other employees, “we all want to see you exercising,” the suit said, adding, “he then asked her to take a video of herself while exercising.”

Jones is looking for compensatory and punitive damages, as well as attorneys’ fees.