Lawsuit: 'My company waterboarded me!'

(FORTUNE Small Business) -- Is the slumping economy depressing your sales team's spirits? Here's an idea: Pump them up with a little waterboarding!

In January, Chad Hudgens sued his former employer, Prosper Inc., claiming that what was billed as a team-building exercise ended up using a motivational tool previously reserved for enemy combatants. According to Hudgens's complaint, it really was a bonding experience: Co-workers held his arms and legs to prevent his escape while a gallon of water was poured into his mouth and nose so he couldn't breathe.

Other employees at the executive-coaching firm, based in Provo, Utah, remember things differently.

"According to one witness a lot of joking was going on, high-fives, and then they all went to lunch," says Prosper president Dave Ellis, adding that he was unaware of the outing until Hudgens complained.

As for the actual technique, Ellis believes the employees weren't channeling Guantánamo but Socrates, who reputedly dunked a prospective student's head underwater to make a point about wanting to learn as badly as wanting to breathe.

"I don't know if sales went up or went down" after the training exercise, says Ellis, 56. "I do know the response from the team members regarding the allegations: They felt so strong a backlash to the plaintiff, it solidified some of the morale of the team."