Former Exec Accuses Systemax Of Gender Bias, Product Safety Violations

A former executive with Systemax has filed a federal lawsuit against the hardware reseller, accusing it of gender discrimination and retaliating against her when she voiced concerns about potential product safety compliance failures.

The company’s CEO and CFO are also named as defendants.

According to court documents, Danielle Markou, a former vice president of risk management for the company, based in Port Washington, N.Y., filed the suit last week, claiming she was wrongfully terminated in 2013 after a five-year tenure that she alleged was filled with incidents of gender discrimination. She also accused the company of retaliating against her for complaining about her work environment and what she said was the company's failure to meet product compliance requirements, in part by not reporting consumer complaints of potential product malfunctions.

[Related: Systemax Restructure Closes Retail Business, Ignites Companywide Layoffs And Cutbacks]

Systemax -- No. 17 on the CRN Solution Provider 500 list -- is a $3.44 billion reseller giant. Its North American Technology group sells products and solutions under the names TigerDirect, Circuit City, Global Computer and Infotel to both businesses and consumers. The company sells a wide array of electronic devices and software from such vendors as Dell, Lenovo, Microsoft, Intel and HP.

The suit did not offer a specific monetary amount Markou is seeking because she continues to suffer ’physically and emotionally,’ court documents said.

According to Markou’s complaint, Systemax paid her less than her male counterparts, denied her the title of executive officer held by her male peers and terminated her on the basis of her gender and the fact that she was pregnant.

Markou accused the company of repeatedly ignoring her concerns regarding product safety and an inadequate allocation of resources to its global safety, product compliance and risk management operations.

She also alleged that the company retaliated against her by demoting her after she reported her concerns, and firing her just days after she sent an email to the human resources department stating she was pregnant.

Markou alleged that the company made her use her paid time-off hours whenever she left the office -- including coffee breaks -- and vacation time for doctors' appointments. In her statement, she said the practice was not common among her male peers and she believes the company was enforcing the restrictions on her as retribution for her complaints.

According to a statement from Michael Smargiassi, a Systemax company spokesman, and published by Newsday, the company called the allegations ’baseless.’ Systemax, the statement said, "takes safety and gender equality very seriously and has adequate controls in place. … We look forward to defending ourselves."

Markou began working at Systemax in 2008 and was promoted to vice president of risk management in 2011. According to her complaint, a year later, she became concerned that her department was understaffed and underfunded and could not meet legal and compliance requirements in the areas of global safety, product compliance and risk management. She alleged that her concerns were ignored when she brought them to her superior, Larry Reinhold, current director and chief financial officer.

Similarly, according to court documents, she reported concerns of an increase in consumer complaints about "popping" noises emitted by electronic devices that were sold by the company and that her concerns were ignored by Chairman and CEO Richard Leeds. Further, Markou charged that these concerns were not disclosed in the company’s quarterly or annual financial reports, or in media releases. Therefore, the suit alleges, Systemax misrepresented the extent of its potential liabilities and possible violations of consumer product safety, and defrauded its board and shareholders, as well as the U.S. Securities and Exchange Commission.

In January 2013, according to the suit, Markou complained to Reinhold about what she said was the disparity between her salary and the salaries of her male peers, and also that she should have an executive officer title as they did. In her court filing, she said Reinhold first berated her about her complaint, then later told her he would look into the matter, but did not. Two months later, Markou said in the filing, she emailed her concerns to Leeds, and she was demoted not long thereafter.

After she was audited over a $738 discrepancy in travel reimbursements, she claims, Markou was questioned by Leeds and Reinhold in June, and told to resign. When she did not, she said in her court filing, she was placed on administrative leave and, after emailing human resources about being pregnant -- which she said she had previously informed her superiors about -- she was fired.

The case was filed in U.S. District Court for New York’s Eastern District, based on Long Island.

According to the court filing, Systemax, Leeds and Reinhold are accused of violating the Civil Rights Act of 1964, the Pregnancy Discrimination Act, the Consumer Product Safety Improvement Act, and the Sarbanes-Oxley financial disclosure law. Markou also alleges that the defendants violated New York’s human rights law.


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