“Unlawful” and “hypocritical”: WeWork members threaten legal action over fees

Co-working giant has sparked controversy by staying open during the crisis, claiming some members run essential businesses

(Credit: Alex Tai/SOPA Images/LightRocket via Getty Images, iStock)
(Credit: Alex Tai/SOPA Images/LightRocket via Getty Images, iStock)

A group of WeWork members is threatening the co-working giant with legal action if it continues to collect fees even though the coronavirus has prevented them from using the space.

In a letter to WeWork’s general counsel on Thursday, an attorney for the members said WeWork’s collection of fees was “unlawful” because state and local authorities have directed nonessential personnel to stay home. It is also “hypocritical,” said the attorney, Jim Walden, since WeWork itself has reportedly failed to pay its own rent at some locations.

The members are from New York, Los Angeles, and Washington, D.C., where stay-at-home orders are still being enforced.

“Our clients have no legal obligation to pay their membership fees while the purpose of their membership agreements remains frustrated by the Covid-19 pandemic,” Walden wrote in the letter, first reported by The Hill.

A spokesperson for WeWork declined to comment.

According to Walden, WeWork members have complied with public health mandates because it is law, and not doing so in some locations carries a steep fine. In some cities, police have shown up at WeWork locations to “clear the premises of anyone disobeying the applicable stay-at-home orders.

Two members represented by Walden’s letter said WeWork’s decision to keep offices open has burdened them with health and economic concerns.

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“The idea of bringing this virus home is not what I wanted to do,” said Ray Miller, owner of an L.A.-based management production company. Miller pays $2,000 a month for three two-person offices that his team is not using.

“It is a financial burden,” said Lisa Kaneff, a freelance copywriter in Washington. She pays $450 a month for a desk that’s situated within three feet of others. “As a freelancer, I’m my only source of income. WeWork is my overhead. I need every penny I can get.”

Although Miller said his team’s space is less dense than Kaneff’s, he is concerned about communal spaces like the kitchen, waiting areas, conference rooms and even elevators. “The whole concept of co-working is that you’re sharing certain spaces,” he said. “I don’t think the space should be open, quite frankly.”

WeWork has kept its U.S. locations open on the grounds that some members operate “essential businesses.” The company has also said its mail service spares it from executive orders such as New York Gov. Andrew Cuomo’s ban on going to work.

The co-working sector has faced unique pressure to balance low revenue with the need of members. As The Real Deal previously reported, Bond Collective is pausing membership and discounting fees for members who need relief.

In the letter, Walden accused WeWork of garnishing fees from some members’ bank accounts without permission. It also called the policy “hypocritical,” citing reports that WeWork didn’t pay its full rent in April.

In recent weeks, angry WeWork members have organized petitions and created YouTube videos to compel the company to change its policy.