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Color Labs acquisition confirmed by lawsuit against CEO

updated 12:29 am EST, Tue November 20, 2012

CEO, Board of Directors sued by cofounder, citing personal conduct

Inadvertently confirming previous rumors of Apple's purchase of startup Color Labs either whole or in part, co-founder Adam Witherspoon has filed suit against both Color Labs' board of directors, and CEO Bill Nguyen. Witherspoon alleges in the filing that Nguyen is responsible for "intentional infliction of emotional distress" as well as preventing him from being hired by Apple as a result of the acquisition.

A large percentage of the document is interpersonal in nature, describing the deterioration of a friendship following Witherspoon's observation of the CEO inflicting corporal punishment on his son during a visit. Nguyen's management style allegedy crossed the line to abusive, including verbal assaults including profanity, retaliation against employees who reported financial mismanagement and appropriation of company funds, and bragging to employees that a frequently-armed cohort of Nguyen was able to "put employees who crossed Nguyen on no-fly lists, have those employees' credit ruined, and was otherwise able to get those employees into other types of trouble" by virtue of the friend's employment at the Office of the Inspector General.

In addition to financial damages, Witherspoon is seeking an order "declaring Color's policies and practices to be unfair and unlawful and requiring Defendants to cease and desist" as well as an order specifically stating Nguyen knowingly and intentionally violated various California labor laws involving reporting illegal activity and retaliation against employees who might be "whistle blowers" in regards to Nguyen's reportedly illicit deeds while CEO of Color.

Electronista contacted a handful of former Color Labs employees. Most of the current employees told us that they were headed to work for Apple, and had no comment on Nguyen's or Witherspoon's behavior. One former employee said "there is no way I am involving myself in that can of worms by talking to you," referring specifically to the lawsuit between Witherspoon and Nguyen. Another ex-employee who reported departing the company at about the same time as Nguyen told us that "I'd like to say that the lawsuit is hyperbole, but I really can't."

Color under Nguyen's direction has had a checkered past -- it was started by Nguyen, Witherspoon, and Peter Pham, amongst others, with Pham leaving for unknown reasons in 2011. Nguyen stepped away from the company over the summer of 2012, with revelations in the court filing pointing to a more complete and formal departure than otherwise publicly revealed after a power struggle on the board of directors, possibly a result of the accusations spelled out in the court filing. Neither Witherspoon nor Nguyen are currently employed by Apple. Apple is rumored to have acquired the engineering team, all branding, intellectual property, and codebase that Color built for less than $5 million.



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By Electronista Staff
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