By  on June 9, 2009

A former employee and would-be whistle-blower has sued Limited Brands Inc., accusing the firm of forcing his resignation even though a federal investigation has already cleared the company of wrongdoing.

In a lawsuit filed in U.S. District Court in Manhattan on June 5, Michael McCormick, who worked as an executive assistant at the Columbus, Ohio-based company, alleged the firm “constructively terminated” him in January 2008 after he accused executives of theft and deceptive bookkeeping.

McCormick contends Limited Brands forced his resignation and, in doing so, violated the Sarbanes-Oxley Act, the 2002 legislation designed, in part, to encourage whistle-blowing on improper accounting.

However, a U.S. Department of Labor report filed on Jan. 14, provided to WWD by Limited Brands, cleared the company of any wrongdoing.

The report, based on a complaint McCormick filed in April 2008, found the former executive assistant made two of his allegations — including one that company executives recorded $200,000 to the wrong budget line to falsely inflate profits — after he left the company. The accusations, investigators wrote, “could therefore not have been a factor in the alleged constructive discharge.” The department dismissed the complaint.

Despite the report’s findings, McCormick’s suit restates allegations of creative accounting, which he says surrounded the launch of a private label line at specialty chain Henri Bendel and corporate credit card fraud by senior executives. He accuses his superiors of creating a work environment so hostile after his complaints to the firm’s human resources department that he had no choice but to resign. He is seeking unspecified damages and legal fees.

As an executive assistant, McCormick provided administrative help and tracked expenses for five vice presidents from November 2006 until January 2008, court documents said.

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