A fired Paradigm agent has filed a breach of oral contract and whistleblower lawsuit that alleges CEO Sam Gores mismanaged the company’s finances and made “vast personal gains by running Paradigm as his personal piggybank.”
Debbee Klein‘s suit, filed at the Superior Court of California by Freedman + Taitelman LLP, makes a number of incendiary allegations against Gores’ management of Paradigm, including that he kept his personal driver and chef on the payroll even as the agency fired staff blaming the coronavirus pandemic and that he was using the company expense account “as a slush fund to pay for his sexual dalliances with prostitutes.”
The complaint says that as the U.S. began to fully deal with the coronavirus pandemic Gores instituted a “March Massacre,” using the virus to cover for his “long-planned, ruthless job cuts,” which forced “200 Paradigm employees to fend for themselves — without any pay and reliable health insurance.” On March 20, Paradigm became the first major agency to announce layoffs and reduced pay for those who remained at the company.
In another bombshell claim, Klein’s suit alleges that Gores “failed to inform his business partners at X-Ray Touring and Coda Agency, two London-based powerhouse music agencies, about the planned UTA merger” until 48 hours before the deal was set to close. The complaint alleges that Gores was privately in favor of the UTA deal, even signing a “document agreeing to the merger subject to certain conditions.” Gores’ partners vetoed the $250 million UTA deal, and the complaint says he lied “to the public and Paradigm’s line agents, claiming he made the decision to call off the merger.”
Klein, a 23-year Paradigm veteran, also alleges that she had to repeatedly endure Gores’ “repugnant and outdated sexism and demeaning treatment of women,” including listening to his “disgusting and lascivious comments about his sex life.” The complaint also says Klein was passed over for promotion of “less qualified male agents at her expense.”
The lawsuit said Klein had a binding oral employment contract, under which she could only be terminated for good cause, meaning her job loss was in direct breach of the employment contract. It said the agency owes Klein nearly $2 million remaining under the terms of her contract and that Gores’ “gambit” was to fire her and “avoid scrutiny by terminating Ms. Klein in the midst of the present pandemic.”