WeWork Members Hire Lawyer to Demand Coworking Company Stop Charging Fees
A group of WeWork members hired a high-profile lawyer to demand the coworking giant stop collecting membership fees during the coronavirus pandemic that has rendered them unable to use the space.
Jim Walden, of Manhattan firm Walden Macht & Haran, sent a letter to WeWork’s general counsel Jared DeMatteis today on behalf of “numerous” WeWork members in New York, Los Angeles and Washington, D.C. calling on WeWork to stop collecting the fees and pay back the ones already collected.
“State and local authorities around the country have directed businesses to cease operation and have prohibited workers, including our clients, from using their workplaces,” Walden wrote. “As long as this pandemic prohibits our clients from using their WeWork office spaces, the purpose of their membership agreements is frustrated, thus excusing their obligation to pay membership fees.”
A spokeswoman for Walden declined to say how many members were involved in the action.
In the letter, Walden threatened to start an arbitration process for WeWork members if the company continues to collect the fees. The letter was first reported by The Hill.
A spokesman for WeWork did not immediately respond to a request for comment.
WeWork members across the globe have banded together to call on WeWork to stop collecting membership fees while companies can’t use their offices and close all of its locations to stop putting its employees in danger, as Commercial Observer previously reported. Members have created petitions, online websites and YouTube videos while others are considering class-action lawsuits.
“They just turned into fucking Vinnie from the Mafia,” Ray Miller, a WeWork member in Los Angeles, previously told CO about WeWork’s aggressive collection tactics. “They just really let us down as tenants and they had opportunities to look like fucking heroes.”
Walden wrote in the letter that WeWork took out membership fees from some customers’ accounts without permission — after being told not to — and called out the coworking behemoth for not paying rent itself in April.
“WeWork’s actions in this regard are both unlawful and hypocritical since, as we understand it, WeWork has not been paying full rent to its own landlords,” Walden wrote.
While landlords in New York City asked tenants to continue to pay up during the coronavirus under traditional leases, WeWork members have argued the way WeWork frames its deals makes them more akin to gym memberships, which means they shouldn’t be on the hook for if they can’t physically access the space. Walden also argued that the coronavirus pandemic nullifies members’ obligation to pay the fees under New York law.
“Our clients have no legal obligation to pay their membership fees while the purpose of their membership agreements remains frustrated by the COVD-19 pandemic,” Walden wrote. “Ignoring this fact, WeWork continues charging these members full monthly fees and refuses to offer concessions or compromise.”