A legal challenge is calling on a court to overturn an order allowing the central organization developing the Tron cryptocurrency to privately litigate a lawsuit through arbitration.
Richard Hall and Lukasz Juraszek, employees fired from the Tron Foundation last year, filed a writ of mandamus with the First District Court of Appeal in California in San Francisco on June 17 to reverse arbitration in a lawsuit alleging wrongful termination and hostile work practices at BitTorrent, a file-sharing service acquired in 2018 by the Tron Foundation. In March the San Francisco Superior Court approved the Tron Foundation and BitTorrent's request to settle the lawsuit in arbitration instead of in court.
“We are confident the Court of Appeal will give due consideration to the legal issues framed,” one of Hall and Juraszek’s lawyers in the lawsuit, William Fitzgerald of Fitzgerald Law Offices, said in an email to CoinDesk.
Unlike an appeal, where an open-ended judgment on a civil or criminal case’s final outcome is rendered potentially after several years, a writ of mandamus decides within months whether a court fulfilled or violated its obligations.
The writ of mandamus says the Tron Foundation and BitTorrent submitted inadmissible documents supporting an arbitration agreement that contained illegal contractual terms. According to the writ of mandamus, the San Francisco Superior Court acknowledged the arbitration agreement was “unconscionable,” or skewed to favor the employer, but sided with the Tron Foundation and BitTorrent anyway.
The San Francisco Superior Court ruled the arbitration agreement was valid as long as the employees saw, and took the initiative to sign, the paperwork. Hall and Juraszek responded in February to the Tron Foundation and BitTorrent's motion to compel arbitration by claiming they had not read or were not permitted to negotiate the agreement.
The lawsuit alleges Tron's CEO, Justin Sun, and Tron head of engineering Cong Li assaulted Tron personnel during office meetings, favored Chinese employees and harassed Hall and Juraszek for alerting the company to pirated content and child pornography circulating on BitTorrent programs. The alleged retaliation campaigns involved Sun and Li demoting and firing Hall and Juraszek, who had above-average scores on performance reviews, and tampering with their personnel files and corporate email accounts to orchestrate a cover-up.
Hall and Juraszek filed the lawsuit in October after reporting the Tron Foundation and BitTorrent to the California Department of Fair Employment and Housing (DFEH), a state labor agency that handles employment discrimination and harassment. The California DFEH in October gave Hall and Juraszek permission to file the lawsuit after they chose to move their complaints about the Tron executives and entities to a court of law.
The incidents allegedly occurred at the Tron Foundation’s San Francisco office, the site of the Tron BitTorrent team. The Tron Foundation is headquartered in Beijing, China.
“We believe the Court issued a detailed and well-reasoned order compelling Mr. Hall and Mr. Juraszek to arbitrate their claims against Rainberry under Rainberry’s legally compliant arbitration program,” Ellis Liu, a spokesperson for the Tron Foundation, said in a statement to CoinDesk. BitTorrent was renamed Rainberry in California corporate records following its $120 million sale to Sun and merger with the Tron Foundation.
CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.