The New Penthouse Letters: HR Exec Files FriendFinder Suit

FriendFinder Networks, the publisher of Penthouse and operator of adult-classifieds websites, is facing a sexy legal scandal. A former top executive who went public with her grievances has now filed a lawsuit.

Natalie Cedeno, FriendFinder's former director of human resources, was fired in January without cause, she says, after a series of run-ins with management over practices she believed were improper or illegal.

Cedeno claims the atmosphere at the company changed substantially after Penthouse Media Group acquired Various Inc., the operator of Adult FriendFinder and other websites, in 2007 and changed its name to FriendFinder Networks. Various was buttoned-up, she says, despite operating websites where users planned hookups. Penthouse, by comparison, was pure frat-boy raunch — an attitude which culminated in an incident where a Penthouse Pet draped her boobs on an unwilling female employee in a staged photo meant to humiliate her.

There's more. The complete lawsuit is included below, but here are the highlights — or lowlights:

25. In or about April, 2008 plaintiff received complaints regarding racist comments concerning employees and prospective employees being made by the company's Controller, Al Mercado. Mercado made racially disparaging comments regarding Indians, Asians and people whose spoke English as their second language, which he admitted to Plaintiff. Plaintiff met with and counseled Mr. Mercado on three separate occasions, yet his discriminatory conduct continued. The complaints regarding Mr. Mercado's racially disparaging comments were received from Accounting Supervisor, Brinda Calori who had asked to be given a new assignment because she was distressed by Mercado's conduct. Plaintiff went to Carmela Monti and recommended that Mercado be discharged. Monti refused to terminate Mercado and instead ordered that Ms. Calori be terminated. Plaintiff objected to Monti's decision to terminate Ms. Calori and complained to the Vice-President of Finance who refused to become involved. Plaintiff is informed and believes and thereon alleges that Ms. Calori has filed a complaint with the EEOC for retaliatory discharge resulting from her complaints.

28. In May 2008 FriendFinder brought two Penthouse Pets and a male model into the Sunnyvale office to serve ice cream to the employees. The Pets were dressed in revealing attire that caused a female supervisor to complain that their presence and the fact that they were "porn stars" made her so uncomfortable that she would stay in her office away from this activity. The Pets went up to the supervisor's office and one of them placed her breasts on the employees head while two other employees' took pictures. The supervisor came to Plaintiff's office in tears. She was visibly shaken and upset and informed Plaintiff that she was afraid the photos would be put on the Internet. Plaintiff had previously telephoned Carmela Monti, informed her that the Pets were pinching the nipples of the male employees, rubbing their bare chest and inappropriately touching staff, and asked that Monti allow her to have the Pets removed from the office. Monti had refused Plaintiff's request and after the incident involving the supervisor Plaintiff called Monti again, asking that the Pets be removed because their behavior violated the company's sexual harassment policy. Monti again refused Plaintiff's request that she be authorized to direct the Pets to leave the office. COO Tony Previte appeared supported Monti's decision, stating that the employee who complained was a "trouble maker."

39. In or about August or September, 2008, the Chief Technology Officer (CTO) of the Las Vegas office, Jason Rasberry, made inappropriate sexual comments concerning a female employee (TE). The CTO said to 5-6 male coworkers in the presence of TE (the group was standing together on a smoke break) "I've had seen TE naked and her breasts are too small." The CTO admitted having made the comment. The CTO had a history of previous misconduct in the workplace for which he had received disciplinary action. Prior to this incident the CTO had asked a male applicant who was interviewing for a position in the company's Technology Department to "chose any item and he would have one of the girls on cams.com insert it into her vagina."

FriendFinder appears to be facing severe financial trouble. The company filed for a $460 million public stock offering in December, in an effort to pay off more than $400 million in debt incurred during the Penthouse acquisition. That IPO has yet to happen. But the stock market remains unfriendly to IPOs, and FriendFinder has defaulted on some of its debt, according to a new SEC financing. A tipster tells us the company recently laid off eight marketing staffers in an effort to cut costs. And top executives seem to disagree on whether the company can afford to keep publishing the print edition of Penthouse. (FriendFinder's corporate website now softpedals the company's porn business, highlighting G-rated social networks like BigChurch.com instead.)

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