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Node Labs Accused Of FEHA Violations Among Other Claims

By: Heather Schafer – Armada Law Corp.

This week Plaintiff, Christopher Lynch, filed a Complaint in the San Francisco County Superior Court against Node Labs Inc., Compound Genetics LLC and Felipe Recalde and Lauren Avenius as individuals. At issue is a number of violations of the California Fair Employment Housing Act (“FEHA”) as well as Wrongful Termination, Defamation, Infliction Of Emotional Distress and Breach of Contract among other claims.

This case alleges that in June of 2014 Plaintiff Christopher Lynch was diagnosed with Parkinson’s Disease but was able to perform his duties with or without accommodation. In 2017 Lynch began working on genetic development and breeding of cannabis plants. Shortly thereafter, Lynch formed Compound IP LLC, aka Compound Genetics, and operated the business as it’s sole owner. In Spring of 2019, Compound Genetics entered into negotiations for purchase with Node Labs Inc. By Summer of 2019 Lynch and Node had finalized the negotiations for purchase and Lynch was provided an Employment Agreement for $100,000 per year salary as well as $15,000 for every seed harvest, medical benefits, short term housing and relocation benefits in the amount of $10,000. In consideration of the Agreements, Lynch turned over all business assets, including all social media accounts, data and trademark documents. Additionally, Lynch signed what he believed to be the previously discussed and agreed upon Employment Agreement, which had been based upon the original Term Sheets provided and discussed at length. However, Node is believed to have switched out the Employment Agreement for a similar one that “intentionally included terms that had not been agreed to and were materially different and less favorable to” Lynch per the Complaint.

According to the Complaint “Whereas the Contract afforded Plaintiff approximately 235,294 shares amounting to $400,000 in equity, the APA stated that Plaintiff was only owed 58,514 in shares amounting to approximately $125,000 in equity. The APA was not presented to Plaintiff as a new contract. Further, Plaintiff was not made aware of the changed terms until approximately February, 2022.”

High at 9 News spoke with their very own, Attorney Dale Schafer, who stated “These are allegations only at this point but the lessons to be learned here include working with a competent attorney you can trust and reading contracts before you sign them. In the cannabis industry, one should always be careful of believing the promises of people trying to get something from you. A well-written contract goes a long way towards preventing the kind of shit sandwich that seems to have developed in this case.” Plaintiff, Lynch, is requesting a Jury Trail in this matter.


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