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Friday, April 26, 2019

California Employees of Votem, Cleveland Blockchain Company that Closed Abruptly in February, File Class-action Suit

Posted By on Fri, Apr 26, 2019 at 10:40 AM

The California-based employees of the erstwhile Cleveland blockchain company Votem, which abruptly closed its doors in February, have filed a class-action lawsuit seeking unpaid wages.

In a complaint filed earlier this month in San Diego, four plaintiffs alleged that Votem's CEO, Pete Martin, was aware of the company's "dire" financial situation, but repeatedly misled employees through late 2018 and early 2019.

After failing to timely make payroll in one instance in 2018, Martin assuaged employees by calling the delay a "glitch," the complaint alleged. In 2019, he borrowed money from a Votem investor and from a "high-interest lender" to make payroll, but on Feb. 15 laid off more than 60 employees located in the La Jolla, California, offices with no warning. 

Scene reported on Votem's closure in February. Martin issued a statement at the time saying that despite layoffs, including employees at the Cleveland office, Votem had not closed. In his words, the company had "kicked off a restructuring and recapitalization" plan.

But the plaintiffs in the complaint alleged that because Martin had misrepresented the company's financial health — "even days before [the company] closed its doors" — the laid-off employees were taken by surprise. (California labor law requires that 60 days notice be given.) 

The class-action suit is open to all California-based employees of Votem. These employees were formerly employed by the online voting company Everyone Counts, which Votem acquired in October, 2018.

Cleveland's ~20 employees were based in Tower City's Start Mart, home of Flash Starts LLC, the early-stage start-up accelerator.

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