A former Ocean Casino Resort executive filed a lawsuit last week alleging that she was fired for questioning the accuracy of the casino’s financial audit submitted to state regulators.
The suit alleges violations of so-called “whistleblower” statutes and also claims gender discrimination played a role in the firing — with being female making her part of a legal “protected class.”
Loretta Pickus, who was a senior vice president and general counsel for the casino, also is suing parent company Luxor Capital — a hedge fund — as well as audit committee members Cory Morowitz and Fred DeVesa.
The unlawful termination claim by the 30-year veteran of the Atlantic City casino industry, who worked for bankrupt predecessor Revel from 2013-15 before resuming her role just before Ocean opened in mid-2018, stems from issues that began in January 2019 and peaked in January 2020.
At the latter time, Pickus alleges that she was fired because she should have been “softer” and spoken “less harshly” in a meeting with members of the casino’s audit committee.
“The casino would not have told a male General Counsel that he should have spoken more softly and less harshly to the Audit Committee,” Pickus’ lawsuit asserts.
In the beginning …
The lawsuit paints a portrait of a technical violation that spiraled out of control.
In January 2019, Ocean announced it had hired a new director of surveillance — apparently on a permanent basis, which is relevant because a temporary appointment would have expired in May 2019. The director, Mark Evans, continued in that position through much of July, according to Pickus’ lawsuit.
An anonymous tip about Evans’ role was brought to Pickus’ attention on July 8, leading her to seek advice from the state Division of Gaming Enforcement as to what to do next.
Ten days later, the three audit committee members allegedly said they didn’t recall if Evans had been hired temporarily or permanently.
DeVesa is alleged to have said at the meeting that he didn’t want the demotion of Evans and hiring of a replacement to be reflected in the minutes because “there would be less liability” for Ocean if the hiring process was found by the DGE to have not been followed properly.
The subsequent filing to the DGE included claims that Ocean management had not consulted the committee in January regarding the hiring of Evans, thereby violating the audit charter. The committee also asserted that it understood Evans’ appointment to be temporary.
“Correcting the record” proves to be problematic
According to Pickus, there were no discussions about such claims at the July meeting, meaning that the filing was false. She complained to Ocean CEO Terry Glebocki, who recommended that Pickus write up an amended version of the July minutes to correct the record.
But, Pickus says, the audit committee rejected the revised minutes of the meeting. In August 2019, DGE officials launched an investigation into the possible violation of the audit charter.
Pickus told those DGE officials that the audit committee members were “confused” in July about the circumstances of Evans’ hiring — which was that he was hired on a permanent basis.
Around that same time, Morowitz is alleged to have emailed fellow defendant DeVesa to inform him of Pickus’ communication with DGE. Morowitz is said to have written that Pickus had thrown them “under the bus” and that “bottom line, we now have a toxic relationship with Loretta.”
DeVesa is alleged to have replied that he didn’t remember approving Evans’ hiring in January.
The scarlet letter from the DGE boss
In November 2019, a DGE letter to Ocean further advanced rancor that ultimately resulted in the filing of the lawsuit. Pickus asserts that DGE Director David Rebuck, “a longtime personal friend” of DeVesa, “made false factual misrepresentations” in the letter of Pickus’ objection to the July 2019 filing.
The letter, she alleges, “inaccurately states the minutes for the Audit Committee meeting on January 17, 2019 indicate the committee was advised at that time that Mr. Evans would be ‘just filling in.'” The minutes, however, show that Evans was said to be “filling the role of previous Director of Surveillance.”
The letter also is said to have “stated falsely that [Pickus] orchestrated the company’s decision to remove Defendant Morowitz as Audit Committee Chair in retaliation for his participation in the NJDGE investigation into the July 2019 minutes.”
Five days later, Pickus wrote a reply to the DGE that she says corrected the record — but not before consulting with Ocean Casino attorneys, who advised Pickus not to send the letter and thereby “rock the boat” with DGE.
A few days after that, Pickus alleges that Rebuck advised Ocean officials to disinvite her from an upcoming meeting between DGE and Ocean, and that Ocean officials agreed.
Following the meeting, Pickus claimed that she was told that Rebuck basically told the Ocean officials that “there are people that you shouldn’t have in your organization. They are holdovers. They need to go. Call me later, as I do not want to name them here.”
Pickus notes that she was the only “holdover” from the star-crossed days of Revel casino (born 2012, died 2014).
The call that followed the letter
On the same day as the meeting, Rebuck also is said to have participated in a conference call with Luxor management in which he said that Pickus “does not know what she is doing” and that the DGE had issues with Revel during its bankruptcy phase — and that Luxor should fire Pickus for those reasons.
Pickus’ suit does not specify how she received such information about Rebuck’s alleged comments.
The meeting and the phone call came as Ocean’s new owners were seeking final regulatory approval from the DGE, Pickus adds — all the more reason not to want to “rock the boat.”
In December 2019, Pickus said she received a $20,000 bonus and was told that her bonus could grow to as much as $50,000 in the upcoming year.
A month later, Pickus allegedly informed Ocean Casino legal counsel of her intention to attend the audit committee meeting the following day — and says that she was told, in effect, to “clear the air, but do not go into the facts at issue.”
Pickus said she then made a short statement and offered a memo asking that the committee “correct its July 2019 Minutes and take responsibility for submitting false minutes to the DGE.”
Fired — and the aftermath
Four days later, Pickus was fired because, she was told, of her behavior at the meeting.
“As a direct and proximate result of Defendants’ aforesaid conduct, Plaintiff has suffered and shall continue to suffer loss of earnings and other employment benefits, severe mental, physical, and emotional distress, stress, humiliation, pain, damage to reputation, and harm to her career development.”
The firing was made, according to Pickus, in violation of “whistleblower” laws that prevent retaliation against employees who report improper conduct by their employers.
Pickus seeks back pay, benefits, compensatory damages, and punitive damages as well as attorney’s fees — and a mandate that Ocean executives undergo training in preventing discrimination, retaliation, and harassment in the workplace.