WeWork Members Threaten Legal Action Over Monthly Fees: Lawyers

NEW YORK, NY — Lawyers representing WeWork members in New York City, Los Angeles and Washington D.C. are threatening the coworking company with legal action for continuing to collect membership fees despite government mandates ordering nonessential workers to stay at home, according to a letter sent to WeWork's general counsel on Thursday.

Manhattan-based firm Walden, Macht & Haran is demanding that WeWork cease collection and return any fees to clients collected while governments were enforcing stay-at-home orders. In many cases, WeWork has continued to collect membership fees despite the clients instructing the company not to.

"WeWork continues charging these members full monthly fees and refuses to offer concessions or compromise. In certain instances, WeWork has even taken payment without permission and despite explicit instructions not to. WeWork’s actions in this regard are both unlawful and hypocritical" lawyers with Walden, Macht & Haran wrote in their letter.

With governments ordering nonessential workers to stay at home, WeWork membership agreements should be "frustrated" — a legal concept that renders contracts unenforceable due to unforeseen circumstances such as a global pandemic — lawyers representing members claim. In New York, Gov. Andrew Cuomo's executive order putting the state on "PAUSE," which went into effect on March 22, shut down schools and all nonessential businesses.

"It is difficult to imagine an event more “cataclysmic” and “unforeseeable” than a once-in- a-century global pandemic. It is, likewise, hard to think of an event that more destroys the purpose of a WeWork membership agreement, and renders the agreement more “valueless” to the member, than a deadly, highly communicable disease and resulting government order that prohibit use of the member’s office space," lawyers wrote in their letter to WeWork.

Lawyers plan to take WeWork to arbitration, a legal means to resolving a dispute outside of court, if the company does not freeze memberships and issue refunds for payments made "under protest."

A WeWork spokesperson declined to comment on the claims made by Walden, Macht & Haran.

WeWork kept its New York City offices open prior to Cuomo's shutdown order even as new coronavirus cases spiked in mid-March. Executives at the coworking company said the virus placed WeWork in an "incredibly unique position" — arguing that the company is a service provider akin to banks, pharmacies and grocery stores.

At the same time WeWork was allowing members to use its office spaces, the company was giving its employees the option to work from home and hiring third-party workers to keep its locations running.

WeWork operates dozens of locations throughout Midtown and Lower Manhattan, one in Harlem, five in Brooklyn and three in Queens, according to its website.

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