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Ousted Paradigm agent files explosive lawsuit against her former employer

By Chris Cooke | Published on Friday 3 April 2020

Once the COVID-19 crisis is over, it seems likely there’ll be a flurry of litigation over the ways in which different companies, governments and individuals responded to the pandemic. Especially in the always litigious USA. Though even we didn’t expect a lawsuit quite this quickly. That said, although the legal filing made by agent Debbee Klein yesterday against talent agency Paradigm is very much linked to the company’s COVID-19 response, it also features an assortment of other grievances dating back quite some time.

Talent agencies have been among the companies to immediately feel the impact of the measures put in place to restrict and delay the spread of COVID-19, which resulted in the rapid shutdown of live entertainment and ongoing movie and TV productions. Paradigm – which is active in music and the wider entertainment industry – was one of the first to respond to the crisis with significant lay-offs, with 250 staff members affected.

The company says that it hopes the lay-offs will be temporary and that employees will be able to return within six months. But the move was criticised by many of those directly affected, with particular criticism over the impact it would have on employees’ health insurance. The agency actually subsequently agreed to extend health insurance cover for laid-off staff members to the end of June instead of the end of April.

Klein – a long-term staff member at Paradigm working mainly on the TV side of the business – takes that criticism to a whole new level in her new lawsuit, before outlining a plethora of other grievances with her former employer and its CEO Sam Gores. Along the way he is accused of dodgy accounting, misogyny in the work place, paying for prostitutes with company money, and lying to the agency’s business partners – including its UK subsidiaries – about things like the firm’s abandoned merger with UTA.

“Before Paradigm experienced any economic impact from the pandemic, Mr Gores … had already made up his mind to effectuate long-planned, and memorialized, firings of Paradigm’s employees”, the lawsuit begins. “Mr Gores is so incredibly tone deaf that instead of offering a reduction or forbearance of his own salary, or a contribution of his income to help provide Paradigm employees with a regular salary and health insurance, Sam Gores chose to kick these individuals to the curb”.

It goes on: “The firings consisted of employees whom Mr Gores personally felt were ‘overpaid’. In truth, Mr Gores sought to throw these employees overboard as a direct result of his own financial mismanagement of Paradigm, especially his disastrous negotiations with United Talent Agency, which singlehandedly torpedoed the planned 2019 merger between the two agencies”.

Accusing Gores of using the Paradigm company as his “personal piggy bank”, the lawsuit alleges that “while hundreds of Paradigm employees were left without job security, Mr Gores made sure that his personal driver and private chef remained on the Paradigm payroll. Tragically, at this time of national emergency, Sam Gores believes he has found the perfect opportunity to effectuate his long-planned, ruthless job cuts”.

As for Klein’s own dismissal – on which the lawsuit’s breach of contact claim is based – the lawsuit says that, “despite Mr Gores recently praising Ms Klein [as] the ‘best agent’ at Paradigm, he rewarded her loyalty and consistent high performance by terminating her employment via a phone call lasting less than one minute”.

“Unfortunately for Mr Gores and what remains of the Paradigm agency”, it then states, “he forgot that Paradigm had recently entered into a binding oral employment contract with Ms Klein, under which she could only be terminated for good cause”.

That, the lawsuit reckons, means the agency is in breach of said contract and therefore must pay her the nearly $2 million still owing under that agreement. “Sam Gores hoped to avoid scrutiny by terminating Ms Klein in the midst of the present pandemic. His gambit has failed, and Paradigm must now answer for its unlawful acts in a court of law”.

Paradigm and Gores have already hit back at Klein’s lawsuit, with a legal rep telling reporters that the legal complaint is “littered with false, frivolous and scurrilous allegations”. The rep added that: “Both Paradigm and Mr Gores expect to be 100% vindicated, and our intention is to respond further in court filings”.