BuzzFeed has asked a court to block arbitration claims from about 90 current and former employees who said they were shortchanged in the company’s public offering, arguing that the accusations should be taken before a court instead.
In a complaint filed Thursday in the Delaware Court of Chancery, BuzzFeed and its top executives said that the employees’ dispute was with the public company, and that the claims had to be made in a court. The employees have argued that they are covered by the employment contract issued by BuzzFeed before it went public. That contract says such disputes should be settled in arbitration instead.
In arbitration, which is private and decided by an arbitrator agreed on by both parties, decisions are usually binding. Cases in court, decided by a judge, offer more avenues for appealing a verdict.
Last year, BuzzFeed became one of the first digital media companies to go public. The employees said in their mass arbitration claims, filed in March, that because of administrative errors they were prevented from trading their shares on the first day of trading on Dec. 6, after which the stock price quickly dropped.
The employees said they had filed with the American Arbitration Association because of a clause in the BuzzFeed employment contract diverting certain disputes away from the court system. Companies often use the private arbitration process to prevent class-action lawsuits.
In its complaint, BuzzFeed asked the court to rule that the company did not have to engage with the arbitration claims and to issue an injunction barring the employees from proceeding.
The company said stockholder claims had nothing to do with the workers’ employment with the private BuzzFeed, pointing out that the issues with trading shares were “something all Class B holders faced at the time the transaction closed, many of whom were never employees.”
Yonaton Aronoff, a lawyer representing 42 of the employees, said BuzzFeed was doing “everything it can to avoid responsibility for what transpired” during its public debut.
“Despite forcing its former employees to agree to adhesive arbitration provisions as a condition to their employment,” Mr. Aronoff said, “BuzzFeed first sought to avoid paying its fair share of the arbitration fees, and now seeks to avoid the arbitration altogether.”