Former Partner Alleges Wrongful Termination After Reporting Unlawful Activity

A former Dentons partner claims he was wrongfully terminated from his job after he reported that the firm allegedly forged a document in an attempt to transfer millions in dollars of client funds.

The Case: Zhang v. Dentons U.S. LLP

The Court: California Central District Court

The Case No.: 2:21-cv-04682

The Plaintiff: Zhang vs. Dentons

Jinshu John Zhang, a corporate attorney, was a Dentons partner in the international legal giant’s Los Angeles office. Zhang alleges that he was wrongfully terminated from his position. According to the suit, Zhang reported that the firm forged a document attempting to transfer millions of dollars from a Chinese client. Zhang also alleges bias based on Chinese race or his national origin. The dispute appears to have started over determining Zhang’s share of a “large award of attorneys’ fees” related to a multi-million dollar settlement for a foreign arbitration Zhang handled for a client based in the People’s Republic of China.

The Defendant: Zhang vs. Dentons

The defendant in the case, Dentons, argues that Zhang was fired for cause. The firm alleges that they terminated Zhang for cause on May 5 and immediately entered into arbitration with the plaintiff to attempt to collect the contingency fee award, but Zhang initiated a state court lawsuit against the firm during the dispute resolution process, which violated his partnership agreement with the firm. According to court documents, Zhang continued to participate in arbitration proceedings, but abruptly withdrew from arbitration when an adverse ruling was issued on May 26, 2021. Dentons claims Zhang breached his employment contract by attempting to directly negotiate his share of the award with the client. However, Zhang claims Dentons committed fraud by directing its attorneys to forge the client’s signature to initiate a funds transfer.

Details About the Case: Zhang vs. Dentons

Dentons brought arbitration proceedings against Zhang followed by Zhang suing in California state court alleging Chinese-based employment bias. Dentons removed the state case to federal court alleging jurisdiction based on the Convention on the Recognition and Enforcement of Foreign Arbitral Awards and the Federal Arbitration Act. However, on June 11th Judge Klausner concluded that the case belongs in state court because the firm failed to show jurisdiction was proper under the New York Convention and the FAA does not separately confer jurisdiction to federal court. While the convention does govern international arbitration agreements, the agreement at issue in the case is actually the employment agreement (and its arbitration clause) between Dentons and Zhang, not the arbitration agreement the client sued under regarding the foreign matter (which was previously settled). Since the employment agreement is between two US citizens, the matter does not fall under federal jurisdiction.

If you have questions about California employment law or if you need to file a wrongful termination lawsuit, please get in touch with Blumenthal Nordrehaug Bhowmik DeBlouw LLP. Experienced employment law attorneys are ready to assist you in various law firm offices located in San Diego, San Francisco, Sacramento, Los Angeles, Riverside, and Chicago.