Former employees of defunct news startup The Messenger are suing the company after all 300 staffers were laid off and the site went under.
The Messenger’s former staff are accusing the site of violating the Worker Adjustment and Retraining Notification Act (WARN) Act by laying off employees without giving at least 60 days’ notice and denying employees owed benefits and wages, a complaint filed Thursday asserts. (RELATED: LA Times Implodes As Dozens Are Laid Off, Millions In Revenue Flushed Down The Toilet)
READ THE COMPLAINT:
“On the afternoon of January 31, 2024, the remaining employees learned from a New York Times news item that they were being terminated. Within minutes after the story broke, The Messenger confirmed to the approximately 300 employees that they were terminated effective immediately,” the complaint reads.
“Defendant failed to pay the Plaintiff and each of the New York Class Members their respective wages, salary, commissions, bonuses, health and life insurance premiums, accrued holiday pay and accrued vacation for 60 days following their respective terminations, and benefits including health and life insurance coverage, for 60 days, that would have been covered and paid under the then-applicable employee benefit plans had that coverage continued for that period,” the complaint continues.
The Messenger is also being accused of violating New York state labor law, where the company was headquartered. Former senior producer Pilar Belendez-Desha is the lead plaintiff in the class action lawsuit filed Thursday in the Southern District of New York.
NEW YORK, NY – APRIL 11: Jimmy Finkelstein attends the Hollywood Reporter celebration of “The 35 Most Powerful People in Media” at the Four Season Grill Room on April 11, 2012 in New York City. (Photo by Stephen Lovekin/Getty Images)
The Messenger shut down on Wednesday after less than a year and all of its 300 remaining employees received notice they were being laid off.
Founder and CEO of The Messenger Jimmy Finkelstein launched the site in May 2023 with a $50 million cash infusion and brought on 300 staff at salaries above market value, Axios reported. Two years prior, Finkelstein sold Washington, D.C.-focused news outlet The Hill for $130 million to Nexstar.
Finkelstein had been scrambling to secure more funding for The Messenger after ending 2023 with a net loss of $43 million, CNBC previously reported based on leaked financial documents.
The site sought to provide a centrist perspective and Finkelstein aspired to generate $100 million in revenue in 2024. In a note to staff, Finkelstein attributed the startup’s failure to economic headwinds damaging the news industry.
“I am personally devastated to share that we have made the painfully hard decision to shut down The Messenger, effective immediately,” Finkelstein said. “The industry has faced extraordinary challenges this past year. The economic headwinds have left many media companies fighting for survival. Unfortunately, as a new company, we encountered even more significant challenges than others and could not survive those headwinds.”