Current and former employees of About.com, the "human guides" site that is owned by Primedia, have filed suit against the publishing company over how their wages were accounted.
The lawsuit was filed on Monday in Manhattan federal court by 34 plaintiffs who allege that Primedia improperly recorded About.com's revenue and expenses in order to make the company's balance sheet look healthier.
A spokesman for Primedia said the company had not seen the complaint and would have no comment until after it had a chance to review the allegations. But "based on what we've seen in the press, the charges look frivolous and without merit," a spokesman told atNewYork.com.
The lawsuit claims that the site and its parent company, Primedia, account for the workers as independent contractors rather than as employees. It alleges that About.com has breached its contract by not paying them a percentage of revenue and by instead awarding "worthless" stock options as bonuses.
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Primedia is already facing a class action lawsuit by current and former employees over stock options that were allegedly promised but never handed over to employees within Primedia's Internet division.
The complaint, filed last August by five plaintiffs, charges that Primedia and its subsidiaries made "false representations" about how it booked and awarded stock options to the employees.
In order to compete in the Internet market, Primedia "regularly and fraudulently induced employees to enter into employment with Primedia and /or its affiliates, or to remain so employed with false representations that the employees had been granted and/or would be granted stock options and bonuses."
The suit, filed in Central District Court of California, alleged fraud in the inducement, breach of covenant of good faith and fair dealing, and failure to pay wages due. It also grabbed notice because it sought to charge the company under the federal Racketeering Influenced and Corrupt Organization (RICO) Act, which is often used in the prosecution of organized crime cases.
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Woman in MySpace Suicide Case on TrialIn its response, Primedia dismissed the suit as "completely frivolous and baseless" and said the RICO allegation was particularly infuriating.
"Although it purports to be a class action, there is only one named plaintiff and a single law firm filed the case. Primedia has always honored its commitments to its employees and it will continue to do so," the company said at the time of the action last August.
The law firm of Rosenfeld, Meyer & Susman, LLP, which is piloting the litigation, said the suit involved all of Primedia's over 500 media properties and could affect every employee of Primedia, as well as many subsidiaries.
Primedia's Internet operations include ConsumerClick, IndustryClick and the About.com portal.





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