CMJ Sued by Former Employees Over Allegedly Unpaid Wages

The drama surrounding CMJ continues, as two former employees have sued the company over allegedly unpaid wages. The lawsuit against CMJ Holdings, owner Adam Klein, and his company Abaculi Media claims that employees haven’t been paid since about October 15, 2015. The case is a “collective action,” meaning other employees can choose to join the suit. Filed today in U.S. District Court in Manhattan, the lawsuit asks for unpaid wages, unpaid overtime compensation, and damages. The lawsuit also claims that CMJ, Abaculi, and Klein “intentionally, willfully and repeatedly” violated federal and New York labor laws.

“Defendants’ unlawful conduct has been widespread, repeated, and consistent,” according to the complaint. Abaculi allegedly had gross revenues of more than $500,000 during the time covered by the lawsuit. At least 10 other former employees may also be plaintiffs, according to the complaint, though the case is allegedly “so numerous” that including all of them “is impracticable.” One of the plaintiffs is owed $38,671.97 in unpaid wages, not including interest, damages, or legal fees, the complaint states. How much the other former employee is owed isn’t specified.

Klein and an attorney who has represented him didn’t immediately respond to Pitchfork’s request for comment about the lawsuit.

CMJ Music Marathon took place in venues across New York City for each of the past 35 years. Until now. In late August, Klein—who since 2014 has owned CMJ through Abaculi—told Pitchfork, “CMJ will absolutely happen this year.” During multiple email and phone conversations in the following weeks, he repeatedly declined to provide specifics, more than once explaining that the company is undergoing a “transformation.” (Asked directly if CMJ employees were getting paid on time, he told Pitchfork, “I'm not discussing any aspects of the business, at this stage.”)

Along with the Marathon, CMJ was also a magazine until 2009, and has continued to provide online charts—though CMJ’s Facebook and Twitter accounts haven’t been updated since June. With only 15 days left in 2016, this year’s Marathon has yet to be announced. 

Since 2013, CMJ has also been caught up in a lawsuit by New York promoter John Scher over a failed deal to buy the company from its co-founders, Bobby Haber and Joanne Abbot Greene. (Haber, who with Green launched a new music festival and conference, Mondo.NYC, in September, recently declined to comment to Pitchfork.) Klein’s Abaculi was added as another defendant in 2015. 

Then, this past April, a Boston-area company called Remote Facilities Consulting Services sued Abaculi in a case involving alleged non-payment of more than $400,000. The two sides settled in June. On August 29, a federal judge in Massachusetts entered a $425,000 judgment against Abaculi for failure to make the payment required by the settlement agreement. On September 14, Klein asked the court to throw out the judgment. On November 28, U.S. District Court Judge Leo Sorokin denied Klein’s request, thus keeping the $425,000 judgment in place.

Klein’s lawyers have disputed the allegations in these court proceedings against Abaculi.

In 2012, when Klein was CEO of eMusic, he was accused of sexually harassing a female employee in a lawsuit that was later settled. (Full disclosure: I worked on a freelance basis for eMusic, mostly after Klein stepped down.) Klein recently declined to discuss the merits of the harassment allegations when asked by Pitchfork.

In 1993, when Klein was CEO of a South African company called Boumat, he was arrested on charges of fraud, theft, and forgery. The charges, which he has denied, were dropped in 1996, when he pleaded guilty to contravening South Africa’s rules on the movement of currency between countries (formally known as Exchange Control Regulations). He told Pitchfork this “administrative misdemeanor” was a non-issue under U.S. law, and he maintained that the initial charges were “very, very politically loaded.”

Read “CMJ Owner Adam Klein’s Professional Past Raises Questions Over Music Marathon’s Future” on the Pitch.

via Marc Hogan