{"id":1828,"date":"2019-01-29T00:00:07","date_gmt":"2019-01-29T00:00:07","guid":{"rendered":"http:\/\/surfshields.com\/index.php\/2019\/01\/29\/former-munchery-employees-sue-company-blame-ceo-for-shutdown\/"},"modified":"2019-01-29T00:00:07","modified_gmt":"2019-01-29T00:00:07","slug":"former-munchery-employees-sue-company-blame-ceo-for-shutdown","status":"publish","type":"post","link":"https:\/\/surfshields.com\/index.php\/2019\/01\/29\/former-munchery-employees-sue-company-blame-ceo-for-shutdown\/","title":{"rendered":"Former Munchery employees sue company, blame CEO for shutdown"},"content":{"rendered":"
\n

The Munchery <\/span><\/a> saga continues.<\/p>\n

In a new class-action\u00a0lawsuit<\/a>, former Munchery facilities worker Joshua Philips is claiming the startup owes him and 250 other employees 60 days\u2019 wages, citing The Worker Adjustment and Retraining Notification Act<\/a>, a U.S. labor law that requires employers with an excess of 100 employees to give notice 60 days ahead of mass layoffs.<\/p>\n

Munchery, a prepared meal delivery company headquartered in San Francisco, announced in an email to customers on January 21 that it would cease operations, effectively immediately<\/a>. The abrupt shutdown not only came as a surprise to Munchery\u2019s community of customers, but shocked\u00a0vendors, many whom had been expecting payments<\/a>\u00a0from the business for several weeks. Munchery\u2019s own employees were left in the dark, too, according to several former workers who spoke to TechCrunch about their debt and dissatisfaction with chief executive James Beriker.<\/p>\n

Munchery ordered mass layoffs on January 21, per the lawsuit, the same day customers were notified the company would go out of business. In total, Philips is seeking\u00a0equal to the sum of his and other affected employees\u2019 \u201cunpaid wages, salary, commissions, bonuses, accrued holiday pay, accrued vacation pay, pension and 401(k) contributions and other ERISA benefits, for 60 days, that would have been covered and paid under the then-applicable employee benefit plans.\u201d<\/span><\/p>\n

Munchery is deep in a pile of debt. The startup\u2019s former vendors, which includes San Francisco-based Dandelion Chocolate and Three Babes Bakeshop, say they\u2019re owed tens of\u00a0thousands in overdue payments. Those businesses, and several other small vendors in San Francisco and Los Angeles that notified TechCrunch <\/span><\/a> following the publication of this<\/a> story, are still awaiting overdue payments, with one supplier claiming to be owed north of $100,000.<\/p>\n

As of Monday morning, Munchery had yet to file for bankruptcy.<\/p>\n

\u201cThey entered into a 14-month\u00a0payment plan with us to cover nearly $150,000 in debt, but never had the intention of fulfilling their obligation,\u201d an LA-based Munchery vendor, who asked not to be named, told TechCrunch. \u201cThe entire meal prep business is not sustainable on a grand scale like these companies envision.\u201d<\/span><\/p>\n

On top of its outstanding debts to vendors and facilities workers, Munchery also failed to send final paychecks to delivery drivers. Several Instagram <\/span><\/a> messages provided to TechCrunch show a cluster of drivers in the San Francisco and Sacramento area are confused by the lack of communication from the venture-funded startup and are hopeful checks will arrive.<\/p>\n

After arguing with Munchery employees, a\u00a0delivery driver in Sacramento by the name of Sharon Howard said she finally received\u00a0a \u201cjanky looking handwritten check\u201d from the business on Monday and is hopeful it will clear.<\/p>\n

\u201cMy co-workers up here in Sacramento have not received their final checks and are just um\u2026waiting,\u201d Howard wrote in an Instagram message shared with TechCrunch. \u201cI sort of have the feeling that if they don\u2019t speak up, they\u2019re just gonna be forgotten about \u2026 It\u2019s just not right to work with the expectation of getting paid and then just allow Munchery to turn a blind eye.\u201d<\/p>\n

\n\"\"<\/p>\n

Munchery chief executive officer James Beriker joined the startup in 2016<\/p>\n<\/div>\n

Munchery had raised $125 million in venture capital funding at a peak valuation of $300 million from key investors e.Ventures, Infinity Ventures, Sherpa Capital <\/span><\/a> and Menlo Ventures, <\/span><\/a> as well as from Greycroft, <\/span><\/a> M13, Northgate Capital and more since its founding in 2010 by\u00a0Tran and Conrad Chu. Aside from a small $5 million check, all that cash was deployed under the leadership of Tran, who struggled to improve Munchery\u2019s margins and was eventually replaced by Beriker, the former CEO of Simply Hired.<\/p>\n

Munchery, however, struggled under Beriker, too, and ultimately shut down its Los Angeles, Seattle and New York operations and laid off 30 percent of its workforce<\/a>. A former Munchery employee, who asked not to be named, said Beriker\u2019s poor leadership is to blame for the startup\u2019s failure.<\/p>\n

\u201cThe CEO was very disconnected to the business,\u201d the person said in a text message. \u201cWe would see him maybe once every other week and only for 15 minutes \u2014 if that. The kitchen staff didn\u2019t even know who he was when he came to the facility. In my time with the company, he was rarely truthful or transparent about the current state of the business and the future direction. Not to mention his very hefty salary that compared to that of a publicly traded Fortune 500 company.\u201d<\/p>\n

\u201cMy heart goes out to all of the big and small businesses that Munchery\u2019s closure has and will affect,\u201d the person added. \u201cI am also hopeful that the staff who had zero advance knowledge of the closure will find employment quickly.\u201d<\/p>\n

Beriker has not responded to multiple requests for comment from TechCrunch. We\u2019ve reached out to\u00a0Munchery\u2019s investors for additional details surrounding the strange, sudden and silent shutdown.<\/p>\n

Here\u2019s a look at the full legal complaint:<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

https:\/\/techcrunch.com\/2019\/01\/28\/former-munchery-employees-sue-company-blame-ceo-for-shutdown\/<\/p>\n","protected":false},"author":0,"featured_media":1829,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-1828","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/posts\/1828","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/comments?post=1828"}],"version-history":[{"count":0,"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/posts\/1828\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/media\/1829"}],"wp:attachment":[{"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/media?parent=1828"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/categories?post=1828"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/surfshields.com\/index.php\/wp-json\/wp\/v2\/tags?post=1828"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}