WeWork has been sending alarming non-compete letters to workers it laid off earlier this year
Category : entrepreneur
- WeWork has sent alarming legal letters to people it laid off in a round of job cuts earlier in 2019, warning them not to compete with its business.
- The company warned it was “formally putting [them] on notice” even though there is no evidence that the workers have breached their contracts.
- It is normal to remind employees not to pass on confidential information once they’ve left a company, but UK employment lawyers described WeWork’s letters as “heavy-handed” and “aggressive.”
- WeWork declined to comment.
- For more stories about WeWork, click here.
WeWork has been sending “aggressive” legal letters to employees affected by global layoffs earlier this year, sources told Business Insider.
The letters warn the former employees to stick to the terms of their their contracts, or the company will pursue legal action.
The former workers, who were full-time employees affected by a round of global job cuts earlier in 2019, were told that if they break their terms, WeWork will “take action against you personally to recover any loss of profits that the company has suffered or is likely to suffer.”
Business Insider has seen a copy of one of the letters, but is not sharing it to preserve our source’s privacy.
While it is normal to remind an ex-employee about the terms of their contract after they leave their job, it is unusual to threaten them with legal action, especially if there is no proof of wrongdoing, say legal experts.
Employees often forget that they are bound by many of the terms of their employment contract for up to 12 months, the experts said.
Such letters often warn that former staff cannot reach out to clients they interacted with. Also, before they leave, they cannot take with them any proprietary information like documents, code or confidential information about the company. But former WeWorkers who received the letters said they felt stressed by the reminders.
‘It felt heavy-handed’
Susan Thompson, a UK employment lawyer at Simkins, told Business Insider she has rarely seen this kind of communication in her 20-plus year career.
“It feels heavy-handed,” Thompson said. “Ironically, I don’t think this makes them look stronger but weaker. The company is obviously feeling under pressure.”
While Thompson added that no business should ignore when employees break their contracts, threatening a worker who has not done anything wrong yet is unusual.
WeWork’s letter says: “If the company shall become aware that you have committed any fundamental breaches of your contract and/or there is clear evidence…” but does not list any proof of wrongdoing.
“They clearly have no evidence,” Thompson said. “A mere suspicion isn’t enough to take anyone to court.”
Michelle Last, an employment lawyer with Keystone Law also characterized the communication as “heavy-handed.”
“In the absence of any breach of contract this seems unnecessary and overly aggressive,” she said. “Couldn’t they achieve the same end, but without contacting someone in such a manner?”
Last said she would advise the ex-employees to ignore the letters.
She added: “If they continue to feel threatened by the company they could respond and say: “I reserve my right to bring this matter as an attention to the court to consider if your conduct is correct in such a situation.”
But, she said: “It’s probably best to ignore it.”
WeWork is looking to drastically cut costs after several months of drama, during which its cofounder Adam Neumann stepped down as CEO and its major investor SoftBank stumped up $1.5 billion in a rescue deal.
The firm is due to enter a massive redundancy program to cut 4,000 of its workforce, although it isn’t clear when those layoffs will happen.
WeWork has already outsourced its cleaning staff, laid off dozens of employees from its coding school Flatiron, and reportedly cut staff at its subsidiary Meetup.
WeWork declined to comment.