The government's labour agency has filed a formal complaint against WeWork

Wework foundersWeWorkWeWork cofounders Miguel McKelvey and Adam Neumann

Labour issues continue to plague $16 billion co-working startup WeWork.

WeWork, which aims to build “beautiful, shared office spaces” with a community mindset, is now facing a formal complaint from the National Labour Relations Board.

The NLRB, which investigates unfair labour practices throughout the U.S., is asking a federal judge to order WeWork to change policies that ban its employees from filing class action lawsuits. The complaint is a result of a case brought against WeWork by a former employee, Tara Zoumer. Zoumer alleges that she was fired after flagging potential labour violations and refusing to sign an arbitration agreement.

Zoumer also filed a lawsuit against WeWork in San Francisco Superior Court, which was ordered into arbitration in New York. According to a person with knowledge of the situation, that arbitration is still ongoing and is a separate process.

WeWork declined to comment on the NLRB’s complaint, but a WeWork spokesperson provided this statement to Business Insider in June: “This charge has no merit. Our employees are our lifeblood and we firmly believe our policies are fair and lawful.”

The labour board complaint comes days after WeWork filed a lawsuit against a former employee who leaked data that showed the firm falling short of its financial goals.

While the NLRB has brought a formal complaint, WeWork has not yet had the opportunity to present its case. A hearing in front of the labour board has been set for September 7 in Oakland, Calif.

The case

Zoumer worked for WeWork from March to November 2015, as an associate community manager, during which time she alleged violations of California’s labour code, including a lack of overtime and meal breaks due to a misclassification. When she brought these issues up with her managers at WeWork, she was told to not talk with her coworkers about them, and then asked if she wanted to resign, Zoumer says.

After Zoumer spoke with her WeWork superiors, she claims they made all US employees sign new employment documents, which included what she and her attorney characterise as an “unlawful mandatory arbitration agreement.”

Zoumer says she was fired by WeWork after refusing to sign this agreement, which would have waived certain rights, including her right to a class-action claim.

These kinds of arbitration agreements, especially those that strip class-action rights, are controversial. The NLRB considers them to be in violation of the National Labour Relations Act, but there have been conflicting rulings from the courts.

A person close to WeWork, who asked not to be identified discussing a legal matter, said that though the majority of federal courts were on WeWork’s side — in favour of these arbitration agreements — this fight could eventually go to the Supreme Court because of the differences in lower court rulings.

What does that mean for WeWork?

In June, Zoumer’s attorney, Ramsey Hanafi, said that he expected an NLRB complaint to be issued. At the time, the NLRB responded to Zoumer’s charges, notifying her of those they found to be with and without merit.
These were included in an email to Zoumer, from NLRB Field Attorney Lelia M. Gomez:

  1. The Employer violated Section 8(a)(1) of the Act by terminating the Charging Party because of her protected concerted activities, including her refusal to sign the Employer’s Employment Dispute Resolution Program and Invention, Non-Disclosure, and Non-Solicitation Agreement. — MERIT
  2. The Employer violated Section 8(a)(1) of the Act by terminating the Charging Party because of her protected concerted activities, including her activities attempting to enlist other employees in pursuing a wage class lawsuit. — NO MERIT
  3. The Employer violated Section 8(a)(1) of the Act, when on October 21, 2015, West Coast Director Chia Donati instructed employees that they could not discuss their rights, wages, and/or other terms or conditions of employment. — MERIT
  4. The Employer violated Section 8(a)(1) of the Act by maintaining an Employment Dispute Resolution Program that includes a class/collective action waiver, prohibits access to the National Labour Relations Board; and includes a confidentiality provision that precludes employees from discussing their wages, hours, and or other terms/conditions of employment. — MERIT
  5. The Employer violated Section 8(a)(1) of the Act by implementing an Employment Dispute Resolution Program in retaliation for the Charging Party’s protected concerted activities. — NO MERIT
  6. The Employer violated Section 8(a)(1) of the Act by maintaining an Invention, Non-Disclosure, and Non-Solicitation Agreement that includes a confidentiality provision that classifies personnel data as proprietary information. — MERIT.

Those charges with merit are included in the latest NLRB complaint. Now that the complaint has been filed, WeWork has 10 days to file an answer.

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