They allege Match Group and parent company IAC manipulated Tinder’s valuation to “cheat” employees out of billions of dollars.
Co-founders, current executives and former employees of Tinder sued the dating app’s owners on Tuesday, seeking at least $2 billion in damages.
In the lawsuit, the plaintiffs claim Tinder’s owner, IAC, and its subsidiary Match Group “robbed Tinder employees by manipulating financial information, undermining Tinder’s valuation, and unlawfully stripping away their Tinder stock options,” according to a press release. The suit was filed in the New York Supreme Court.
The suit alleges Match and IAC stole billions of dollars from employees through “deception” and “outright lies.” Plaintiffs include Tinder co-founders Sean Rad, Justin Mateen and Jonathan Badeen, as well as three current senior executives.
The plaintiffs allege Match and IAC lied to Tinder employees “to cheat them out of the money to which they were contractually entitled” by manipulating the company’s valuation. In its Aug. 8 earnings call, the suit claims, Match and IAC acknowledged Tinder will likely earn $800 million in revenue in 2018, which is 75 percent more than their projections last year.
The contracts between Match/IAC and the employees establish that as Tinder becomes more valuable, its owners have to pay more, according to the release. They allege IAC and Match therefore manipulated the company’s valuation and stripped employees of their stock options. IAC and Match then took the money they were supposed to pay Tinder employees, the suit claims.
The app owners’ misconduct allegedly included “concocting false financial information, hiding truthful projections of continued rapid growth and delaying the launch of transformative new products such as Tinder Gold,” the release states. It adds that IAC and Match threatened to fire Tinder executives if they were honest about Tinder’s actual worth.
“This is an open-and-shut case,” said Orin Snyder of Gibson, Dunn & Crutcher, who is representing the plaintiffs, in a statement. “The Defendants made contractual promises to recruit and retain the men and women who built Tinder. The evidence is overwhelming that when it came time to pay the Tinder employees what they rightfully earned, the Defendants lied, bullied, and violated their contractual duties, stealing billions of dollars.”
IAC said the allegations are meritless, and it and Match Group will defend against them.
“Since Tinder’s inception, Match Group has paid out in excess of a billion dollars in equity compensation to Tinder’s founders and employees,” IAC said in a statement. “With respect to the matters alleged in the complaint, the facts are simple: Match Group and the plaintiffs went through a rigorous, contractually-defined valuation process involving two independent global investment banks, and Mr. Rad and his merry band of plaintiffs did not like the outcome.”
The suit also alleges that Match Group Chairman and CEO Greg Blatt groped and sexually harassed Tinder’s vice president of marketing and communications, Rosette Pambakian, at the company’s December 2016 holiday party. Pambakian is a plaintiff in the suit.
The lawsuit alleges IAC and Match covered up the incident because Blatt was “leading the effort to rob Tinder’s employees” of the money they were contractually entitled to. An investigation and firing would expose his alleged misconduct and thwart IAC and Match’s “scheme,” it said.
IAC didn’t immediately respond to a request for comment on the allegations against Blatt.
Read the full lawsuit below:
Tinder founders sue IAC/Match by jonathan_skillings on Scribd
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