A former director of Minneapolis-based RSP Architects has filed a whistleblower lawsuit in state court against the firm, alleging he was fired after complaining about financial mismanagement discovered while competing to turn se in its new CEO.
Todd Novak filed the lawsuit in state court in Minneapolis, accusing his former employer of firing him in retaliation after he raised concerns about accounting and the alleged loss of millions of dollars.
Novak has since taken a position as commercial study leader at LHB, an AE firm based in Duluth, Minnesota. But the lawsuit has just begun, with a plan for trial discovery as the final step.
About a month after Novak filed the lawsuit, RSP announced a new CEO, Andrew W. Burnett, who succeeds former boss Dave Norback.
The new leadership and retaliation charges come at a time of apparent prosperity for the 330-person practice. Its projected revenue for 2024 is $88.5 million.
Hired in late 2019 to be a senior associate on RSP’s retail and multi-use projects, Novak was promoted two years later to leader and national market sector leader, with a portion of his compensation based on a bonus pool. His annual salary, the company said in a response to the lawsuit, was $160,000.
But after RSP had two years of turnover in his financial controller position, Novak said, he became concerned.
About a year ago, when Norback announced he was stepping down, Novak applied for the job along with other internal and external candidates and began taking a closer look at the company’s finances. Financial items such as overhead, indirect wages and employee benefits were not “aligned,” Novak claimed, “by an amount in the millions.” He further alleged that the funds could be spent by a handful of firm directors, although he did not allege any personal use of the money.
Last December, just before starting the interview process for the CEO job, Novak raised his financial concerns with other directors who promised to look into the matters but said little else, according to his court complaint . After raising the issue several times, Novak was notified by RSP that he was no longer a candidate for CEO, the lawsuit states.
In March, Novak says Norback notified him the board decided to fire him because of softening economic and market conditions, according to the lawsuit.
In its response to the claim, RSP denied its general allegation that Novak was fired in retaliation and also refuted other details of its court complaint. But he also attacked her account of her work and career at the company, saying she worked on projects but did not earn RSP commissions as she claimed in the lawsuit.
RSP said all bonuses and ESOP contributions were made in accordance with the company’s plans and were properly made based on its profitability and an employee’s individual performance. RSP also said some documents Novak refers to were not financial reports.
In its broader court response to Novak, RSP stated that the company’s financial statements are routinely reviewed by a third party, that it has never made material changes to them and has “never maintained any hidden accounts for discretionary use of RSP executives,” like Novak. loaded
All of the company’s actions, RSP claimed, “were carried out for legitimate business purposes and without retaliation.”
