Following the spectacular flame-out of doomed “centrist” news site The Messenger, owner Jimmy Finkelstein left hundreds of employees high and dry without severance pay or health insurance—prompting them to file a class-action lawsuit, citing New York worker protection laws. And staffers are particularly incensed, The Daily Beast has learned, because an employee handbook—put together by The Messenger’s HR department—promised severance in the event of mass layoffs or restructuring of the business.
The manual in question addressed a theoretical “reduction of force” or “reorganization” by noting that impacted employees would be paid a certain amount following job cuts. “Severance will be paid at the rate of one and a half (1 ½) weeks per year of service, not to exceed six (6) months in duration. Subject to applicable law, employees shall be required to execute the Company’s standard release as a condition of receiving severance pay,” the handbook explains.
Ex-employees told Confider that the two dozen Messenger staffers who were laid off a month before the site’s implosion did indeed receive two weeks’ severance—but those who remained until the end were left empty-handed.
ADVERTISEMENT
The “personnel policies guidebook,” which was reviewed by Confider, does add the following disclaimer on the very front page: “The guidelines and procedures in the Guidebook are not intended or set forth as contractual commitments or obligations to any employee.” Before the $50 million startup burned through all its cash in less than a year, Finkelstein went on an intense hiring spree, bringing in a bevy of high-profile journalists and media executives while promising to eventually create a newsroom of 550 staffers. (The Messenger eventually topped out at 300 employees.) Finkelstein initially dangled attractive salaries to recruits, in an effort to attract talent on both the editorial and business sides—resulting in many of the top earners bringing in high six-digits or even a million dollars annually.
The Messenger’s messy end might also land it afoul of New York’s labor laws for another reason: in its final months, the company slashed the salaries of some top employees without warning, according to three sources with knowledge of the matter.
Dan Wakeford, the beleaguered editor-in-chief, was among those who saw their pay significantly reduced as Finkelstein scrambled to cut costs and raise money, the sources tell Confider. After The Messenger quickly burned through nearly all of its startup cash by Thanksgiving, the media mogul told Wakeford and other managers, and some high-earners on the business side, that they’d need to take pay cuts. The problem is, sources noted, some employees weren’t told ahead of time about the reductions and only found out when they received their paychecks, prompting them to go to HR for an explanation.
Yet according to New York state’s Wage Theft Prevention Act, “for any reduction of wage rate, an employee must be notified in writing prior to the reduction being implemented.”
Senior sources also told Confider that it appeared Finkelstein didn’t include many highly paid editorial staffers in the emergency cuts because he was worried about leaks to the media. The sources said Finkelstein largely limited the salary cuts to those he felt were “loyal” to him and wouldn’t “squeal” to the press. Finkelstein did not respond to a request for comment.
Sources added that one person who did not take a slash in pay to his seven-figure salary was president Richard “Mad Dog” Beckman, whom business-side staffers largely blame for the company’s overspending and lack of ad revenue. Finkelstein, meanwhile, did reduce his own hefty salary at the end, several insiders said. Beckman did not return a request for comment.
Besides filing their class-action complaint seeking lost pay and benefits, ex-Messenger employees have also started a GoFundMe to help colleagues most impacted by the site’s sudden closure. With an initial goal of $50,000, the fundraiser has brought in over $20,000 from donations across the media industry. One of the largest donors is Wakeford, who has taken a lot of flack from ex-staffers over his seemingly hands-off approach towards the newsroom. Senior employees, however, noted that Wakeford was constrained by Finkelstein, who told his top editor not to engage directly with rank-and-file staff and limit his interactions to his deputy editors.
As for Finkelstein, insiders say he is stewing over the criticism he’s faced. With ex-staffers calling The Messenger “the Fyre Festival of media,” one source told Confider that Finkelstein is “ensconced in Florida, brooding about how to exact his revenge against his former employees for badmouthing him to reporters.”
