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The National Labor Relations Board has ruled that accusations of labor law violations against the $16B co-working startup WeWork (co-founded by Miguel McKelvy, pictured) have merit.
The plaintiff, Tara Zoumer, alleges she was fired after pointing out potential labor violations—like lack of overtime and meal breaks—and refusing to sign an arbitration agreement. WeWork has vehemently disputed the claims.
The arbitration agreement, which her attorney calls “unlawful,” makes the signee waive certain rights, including her right to a class-action claim, Business Insider reports. The NLRB considers these types of arbitration agreements to be in violation of the National Labor Relations Act, although they’ve provoked conflicting rulings in the courts.
A person close to the co-working startup told Business Insider that, although the majority of federal courts have been on WeWork's side, the fight could eventually go to the Supreme Court due to the conflicting lower court rulings.
Workers at WeWork have issues beyond arbitration they’re dealing with, as news broke this week that the company plans to cut 7% of its staff and put in place a temporary hiring freeze.
And the co-working behemoth isn’t the sole “unicorn” startup to start shaving costs. Snapchat began its own job cuts over the past year as VC firms pull back spending. [BI]
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