Lawsuit: Dell worker claims being fired after revealing cancer diagnosis

A former Dell Technologies Inc. employee says the company recently cited for its ethical practices allegedly fired him days after he told a manager he needed a liver transplant.

In September, Pennsylvania resident Michael Zappacosta filed a federal lawsuit against both Dell Technologies and its Dell EMC division claiming unlawful discrimination and retaliation in violation of the Age Discrimination in Employment Act and the Americans with Disabilities Act, according to the filing with the U.S. District Court for the Eastern District of Pennsylvania.

Zappacosta, a former customer service engineer for Dell client SunGard Data Systems Inc. in Philadelphia, alleges that he was dismissed from his position on Nov. 1, 2016, five days after he briefed a manager about a cancerous tumor found on his liver. The suit alleges that Zappacosta told his manager the condition required a transplant. He was 51 years old and a 10-year employee of Dell and the company it acquired in September 2016, EMC Corp.

The manager later told Zappacosta his position was being eliminated because of redundancy. No other positions were eliminated at that time, the lawsuit alleges.

In January, Texas-based Dell and Zappacosta agreed to suspend the lawsuit during settlement negotiations, another court filing indicates. Neither Zappacosta nor his attorney, Brian Farrell, could be reached for comment.

Last month, Dell announced being recognized by the Arizona-based Ethisphere Institute as one of the world’s most ethical companies for the fifth consecutive year. The company was one of only three technology businesses cited by the institute “underscoring the company’s commitment to leading with integrity and prioritizing ethical business practices,” according to a Feb. 12 Dell news release.

“Global corporations operating with a common rule of law are now society’s strongest force to improve the human condition,” the release stated.

CEO Michael Dell said “Ethics and integrity matter at Dell. We work hard to earn our customers’ trust, improve our communities, and inspire our team members through sound, ethical decision making. Because at Dell, how we do our work is just as important as the results we achieve.”

In 1997, federal officials fined Dell Inc. $50,000 for selling personal computers in Iran, a violation of U.S. trade sanctions. In 2016, it violated the sanctions again by selling to Iran through its embassies in Germany and France, The Register reported.

In 2010, Dell and its executives agreed to pay the U.S. Securities and Exchange Commission more than $100 million in penalties to settle accounting fraud charges related to supplier rebates used to inflate company revenue figures. Michael Dell and former CEO Kevin Rollins were fined $4 million apiece. They neither admitted nor denied the charges.

In mid-2009, Dell settled a $9.1 million federal gender-discrimination lawsuit filed by former company human resources manager Jill Hubley. The class-action case alleged that Dell “systematically denied equal employment opportunities to its female employees.”


Dell, which was founded in 1984, has attempted to transition from a company best known for personal computers to one offering a full line of tech products and services. The shift was sparked by the slim profit margins generated by commoditized computers versus the larger profits provided by software and storage. Dell is now structured with two segments: client solutions (computers) and enterprise solutions group (networking infrastructure such as software, servers and storage).

The company operates manufacturing plants in the United States, Malaysia, China, Brazil, India, Poland and Ireland. It employed about 138,000 workers at the end of its last fiscal year, SEC filings show.

Dell has posted declining revenue every year since 2011 (fiscal 2012). That trend changed during fiscal 2017 largely due to the late 2016 acquisition of Massachusetts-based EMC. The EMC deal boosted Dell’s revenue but hasn’t helped its bottom line. The company posted a $3.7 billion net loss ($2.1 billion of which attributed to EMC) on revenue of $61.6 billion during fiscal 2017, according to an SEC filing.

Dell also reported a loss of $1.1 billion on revenue of $50.9 billion during fiscal 2016 following a loss of $1.1 billion on revenue of $54.1 billion in fiscal 2015. (Although Dell is privately held, it reports quarterly financials because of the tracking stock it sold when buying EMC and VMware. It also hosts quarterly conference calls with Wall Street analysts.)

In November 2017, Michael Dell told an audience of Boston executives his company has invested $12.7 billion on research and development during the last three years. But that figure conflicts with Dell’s SEC filing indicating the company spent far less, just $4.6 billion: $2.6 billion in fiscal 2017, $1 billion in fiscal 2016 and $920 million in 2015.

Dell spokeswoman Lauren Lee subsequently said the $12.7 billion actually included the R&D spending of seven companies Dell Technologies acquired when it bought EMC. Effectively, the investments largely predated Dell’s ownership.

Dell Technologies increases lobbying amid annual losses

BOSTON — The amount of lobbying money Dell Technologies Inc. spent spiked in the run up to last year’s election amid four consecutive years of losses for the Texas tech giant.

The amount raised by the Round Rock, Texas-based company’s political action committee (PAC) doubled versus 2015 largely with donations from company executives who regularly contributed to the fund, filings with the Federal Election Commission show.

The sharp increase came the same year Dell completed its $58.1 billion acquisition of Massachusetts-based EMC Corp., a deal that resulted in Dell absorbing EMC’s lobbying activities. But the merger did little to put an end to Dell’s annual losses and it’s too early to tell if the lobbying can help Dell reverse its downward trend.

Lobbying experts said it’s not unusual for companies to tap its top executives as regular contributions to PACs that promote specific industry and legislation benefiting the business. A look at Dell’s federal filings reveals a web of connections and provides a glimpse into the role money can play when government business intersects with big business.

iRobot reveals financials of its latest acquisition

The French company that iRobot Corp. bought in October posted profits of $23 million on revenue of $151.5 million during 2016, according to a Friday filing with the U.S. Securities and Exchange Commission.

Massachusetts-based iRobot (Nasdaq: IRBT) reported the financials in an amendment to October filings related to its acquisition of Robopolis SAS. iRobot bought Robopolis, its largest European distributor, for $141 million.

Robopolis’ financials reveal a healthy growth trend. In 2015, it posted a profit of $16.4 million on revenue of $123.8 million, the filing shows.

iRobot is best known for its Roomba home vacuum cleaner. It has sold more than 20 million of the devices since launching them in 2002. The Robopolis deal was first announced last July. The French company represented nearly half of iRobot’s 2016 revenue in Europe, the Middle East and Africa.

“As iRobot expands globally, we are excited about the current and future opportunities in Europe,” CEO Colin Angle said in October.

iRobot, which was founded in 1990, employed 607 workers in late 2016. Last year, it reported a profit of $41.9 million on revenue of $660.6 million.

The company increased it focus on consumer products with the divestiture of its defense and security business in 2016. However, shares have slumped 24 percent during the last six months as investors react to competition from SharkNinja Operating LLC. The company that is also based in suburban Boston markets an ION Robot that cleans floors and carpets and recharges automatically at a comparable price to the Roomba.


Boston bank develops small biz loan technology

BOSTON – One of the oldest lenders in the nation had a hand in developing technology intended to enable banks to win back the small business loan market from alternative lenders.

Eastern Bank

A tech incubator at Boston-based Eastern Bank, founded in 1818, has spun off Numerated Growth Technologies Inc., a startup that developed an online platform designed to identify and contact small businesses eligible for loans of up to $100,000.

Numerated Growth, which was founded in March, developed its tech in Eastern Labs and has generated about $100 million of volume since 2015. The model, which features real-time approval, is based on the tact banks first took with pre-approved credit cards in the 1990s, Numerated CEO Dan O’Malley told deBanked.

“We’re just taking the same rules and applying them here,” he said. “And by the way, that’s what customers want.”

Closing Loans and MCAs — From the Bedroom to the Office

The merchant cash advance industry has gone mainstream so quickly that it has become more difficult to identify potential customers.

Market saturation and industry consolidation have caused the cost of sales leads to increase sharply. Yet a New York business loan broker is finding success by applying lead generation and online marketing strategies to merchant cash advance, or MCA, while expanding the number of services he offers prospects. Funding is just the foot in the door.

Philip Smith, founder and CEO of PJP Marketing Inc., told deBanked the MCA industry’s acceptance has made it more difficult for sales lead generators to produce profits. But expanding the number of services that independent sales organizations (ISOs) offer can offset the contraction. Smith’s life as a stay-at-home-dad, was recently featured in Innovate Long Island, a regional newspaper.

Fintech innovator launches mobile app company

An early innovator of the merchant cash advance industry has re-emerged on the business scene in very different new venture focused on a mobile shopping.

Meir Hurwitz, co-founder of Pearl Capital, the MCA company acquired in 2015 by Capital Z Partners Management LLC for as much as an estimated $60 million, is now the chief visionary officer of ScreenShop. The New York startup markets an app designed to enable users to shop for a specific item by uploading a screenshot of the item to the app.

Working on a mobile app is a longer shot than MCA and it doesn’t always pay off, but Hurwitz said Thursday he’s enjoyed learning the business after two years off and visiting 62 countries since selling Pearl Capital.

“It’s new and exciting for me, but I don’t get paid right away,” he said. “It’s something I haven’t done before — it’s kind of exciting for me.”

Finding the Right Funding Partners

Matthew Guruge wanted more than money. The co-founder and CEO of Awato LLC, a career-counseling firm, was looking for investors for his New Ipswich-based business. Ultimately, he chose a syndicate of five angel investors who could provide key introductions and expert advice in addition to $300,000 in funding.

“We were really interested in getting people who could help us,” Guruge says of his now seven-person startup. “For us, [raising capital] was easy and fast. We were hoping to find mentors who could help the company grow and help us grow as entrepreneurs.”

Startups like Awato have more choices than ever for raising investment capital, but that doesn’t mean it’s easy to find the right funding match or partners.

More colleges provide enterprise architecture training

Enterprise architecture is slowly establishing itself in colleges and universities as information technology matures and becomes a more integral part of business, industry experts say.

The number of US colleges offering enterprise architecture programs continues to grow with schools such as Penn State University and Carnegie Mellon University. The popularity of EA programs is being driven by a need for greater alignment between the goals of the technology side and those of the larger business or organization, said Rosalie Ocker, director of Penn State’s Center for Enterprise Architecture.

Course enrollees are typically technologists “looking to understand the business better and to work with the business side of their organization,” she said. “Tech people and business people have to work together, and EA should span their areas. That’s what we try to do.”

Values suffer as VCs focus funds inside

It’s taking venture capitalists longer to cash out of startups, causing firms to invest more in their own portfolio companies than in new deals, data shows.
The increased use of so-called inside rounds, in which no new investors join in a private equity funding, not only means less capital for entrepreneurs seeking first-time funding, but also means tech startups are having a harder time determining a current valuation because a company’s valuation is often recalibrated as new investors join an investment round.
Experts say a vicious circle is being created as a result: An accurate valuation is critical in making a merger or acquisition deal happen, but with no new investors, most potential acquirers are taking a harder line on what a potential acquisition is truly worth — and that is slowing M&A deals, industry experts say.

Y Combinator’s firms mostly heed ‘go West’ advice

Entrepreneur Jeff Vyduna launched his Cambridge company, PollEverywhere Inc., in April. But he realizes that the odds are against him finding a local investor and remaining in New England.
The three-person company developed an application designed for organizations to gather feedback through text messaging. But Vyduna, who dropped out of the MIT Sloan School of Management to found PollEverywhere with a $20,000 investment from micro venture capital firm Y Combinator, said he’s not expecting local investors to back his business.
That means a move to Silicon Valley, where angel investors are aplenty and the interest is stronger in pre-revenue, consumer-focused startups, which is Y Combinator’s sweet spot. Indeed, only one local VC firm has invested in any of Y Combinator’s 102 companies.