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Employment Lost, Restitution Found

ACS journal editor Anthony Czarnik wins $6 million judgment against firm he cofounded

by Stu Borman
February 14, 2005 | A version of this story appeared in Volume 83, Issue 7


Anthony W. Czarnik, editor of the Journal of Combinatorial Chemistry, recently won a disability discrimination suit and is writing a book about it. His tentative title: "The Taming of the Shrewd."

The book is based on his suit against Illumina, a San Diego company he cofounded. The case was decided in Czarnik's favor in 2002, and the company appealed. In December 2004, the appeals court sustained the lower court jury verdict but reduced the damage award (plus accrued interest) to about $6 million, which Illumina paid last month.

The suit claimed wrongful termination for clinical depression--a disability covered by federal and state laws against employment discrimination. Czarnik was first diagnosed with intermittent clinical depression in the early 1990s, when he was associate professor of chemistry at Ohio State University. Symptoms of his bouts of depression included lack of self-esteem, lack of ability to focus on difficult tasks, and sleeplessness.

Czarnik was given antidepressant medications to treat the condition, which was largely controllable. "The Prozac generation of selective serotonin reuptake inhibitors [SSRIs] came on the market about that time, and I was one of the lucky people who were able to benefit tremendously from that," he says.

"I was one of the lucky people who were able to benefit tremendously from SSRIs."

In 1993, he was recruited to Parke-Davis Pharmaceutical Research in Ann Arbor, Mich., where he directed research on small-molecule combinatorial synthesis and small-molecule inhibition of RNA-protein interactions. In 1996, he was recruited to the start-up company Irori, San Diego, initially as senior director of chemistry and subsequently as vice president of chemistry.

In April 1998, Czarnik was appointed first editor of the American Chemical Society's Journal of Combinatorial Chemistry. That same month, he was recruited to be one of five cofounders of Illumina, a company specializing in microarray and genotyping technology, where he served as chief scientific officer (CSO).

In early 1999, while at Illumina, he changed his medication to a second-generation SSRI that "turned out to be unsuccessful at controlling my symptoms, and I ended up crashing," Czarnik says.

He soon realized that he would not be able to complete an important grant proposal on time and told his colleagues he needed help. In a key confrontation, Illumina Chief Executive Officer John R. Stuelpnagel berated Czarnik for his inability to meet the proposal deadline. Czarnik burst into tears, causing Stuelpnagel to believe he was having a "nervous breakdown," according to the appeals court decision.

Czarnik disclosed to his colleagues that he had clinical depression, and he also changed to a more effective medication. Czarnik says his colleagues began to sideline him. "They stopped including me in critical planning meetings, fund-raising, and strategic decisions." In 2000, he was told to relinquish his CSO position, accept a salary reduction, and permit the company to repurchase a large portion of his Illumina stock. He acceded to the first two demands but refused to give up his stock.

He complained to Illumina's then-new CEO, Jay T. Flatley, about the way he was being treated, but the problems continued to worsen. And in September 2000, he was fired. "Illumina's human resources manager immediately escorted Czarnik out of the building," the court decision states.

In March 2001, he filed suit for wrongful termination. The jury returned a verdict in Czarnik's favor on all of his claims; decided that Illumina had acted with "malice, fraud, or oppression" toward Czarnik; and awarded him damages. The company appealed, and the appeals court supported the lower court decision but decreased the award to about $6 million--$2.2 million compensatory and $2.2 million punitive damages, $1.1 million accrued interest, and $500,000 in attorney fees.

Czarnik continues to serve as an ACS journal editor and now owns his own company, an intellectual property holding company called Protia that he runs out of his home. In addition to writing the book, he is an adjunct visiting professor at the University of Nevada, Reno, and he's a full-time music student at the university, pursuing a bachelor's degree with an emphasis on jazz piano. "It's been a lifelong desire, ever since I can remember," he says, "to be able to play like Bill Evans," the late pianist and composer.

IS THE BIG settlement he received going to change his life? "It changes my life because I no longer have to work for unethical CEOs," Czarnik says.

Illumina believes the outcome of the lawsuit was "both flawed and unjust," Flatley tells C&EN in an e-mailed response. "We understand, however, that the legal process is an imperfect one, and one that sometimes leads to unfair results. While we recognize the system's inherent limitations, we nonetheless continue to respect the process, and it is for that reason that we paid the judgment. As painful as this entire process has been for us, we have chosen to focus our attention on advancing our technologies and genetic analysis products that result from the concerted efforts of our hundreds of employees, rather than upon a single personnel dispute from the distant past. We are very proud of the successes our combined efforts have achieved in the years since these events transpired."

Illumina's counsel adds that "companies are at a severe disadvantage when cases like Czarnik's are tried by juries. Almost no juror has been an employer, while virtually all have been employees who at some time felt wronged by a boss, so they identify with the plaintiff."

Attorney Howard M. Peters of Peters, Verny, Jones, Schmitt & Aston, Palo Alto, Calif., a cofounder of ACS's Division of Chemistry & the Law, comments that this type of discrimination problem "may be more prevalent in small companies, simply because they do not have the resources and flexibility in benefits of larger companies. I'd like to hope this is an isolated case."


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