Pants on Fyre? Festival Workers Left With Empty Pockets

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By Patricio Chile

The Fyre Festival was billed as a luxury getaway. Instead, attendees found a half-empty beach, and workers were left without paychecks. Now the Bahamas Department of Labor is launching an investigation.

The department has received complaints from employees for companies involved with the festival, Robert Farquharson, director of labor for the agency, told Bloomberg BNA May 24. The agency is investigating complaints from about 70 security guards who claim they weren’t paid by their employer in the Bahamas, he said.

“We have started an investigation into why these Bahamians were not paid and exactly what steps they have under the law to get paid,” Farquharson said. “This investigation is not about the Fyre Festival, it’s about the employment relationship of the Bahamians hired to work at the event in Exuma.”

The festival turned out to be a debacle, but it serves as a reminder of the importance of budgeting for employee and support workers when planning high-profile events.

Fyre Media Inc., the company behind the festival, offers an app that allows people to bid for celebrity bookings at events. Its founders, CEO Billy McFarland and rapper Ja Rule, are named in lawsuits from contractors, investors, and attendees, who claim the organizers oversold the festival’s potential.

Ja Rule Attorney: Singer Is ‘Upset'

The event, aimed at attracting investors, was advertised as a luxury music festival on Great Exuma Island in the Bahamas. It was canceled its first day when attendees arrived April 27 to find disaster relief tents for shelter, a gravelly beach, and cold-cut sandwiches in place of the promised “curated” dining options. Scheduled musical acts, including Blink 182, Major Lazer, and Migos, had canceled ahead of time. Some attendees had already paid up to $100,000 for VIP packages.

The company’s staff members have also been affected by the festival’s collapse. McFarland, shortly after the event, told employees at the company’s New York City headquarters that they might not be paid for future work, Bloomberg News reported.

An attorney for Ja Rule declined to comment on specific allegations but said the rapper is “very upset” about the situation.

“There is nothing within his soul that would participate in anything fraudulent, or anything that would deprive anybody of a fair wage,” Stacey Richman, the attorney, told Bloomberg BNA May 24.

Fyre Media and an attorney for McFarland didn’t respond to Bloomberg BNA’s requests for comment.

Growing Pains Common at Startups

The event’s collapse and subsequent financial woes are not uncommon for startups like Fyre Media, said Eric Akira Tate, the labor employment co-chair of Morrison & Foerster LLP’s global employment and labor group.

“It usually takes a fair amount of time before you can get your product perfected, get past the prototype stage to where you can have a marketable product,” Tate told Bloomberg BNA from his San Francisco office. “The notion of the startup flaming out is fairly common in the Valley. When that happens, you have issues with people not getting paid.”

Companies of all shapes and sizes often also underestimate the human resources element of business, Tate said. Businesses, especially startups, should prioritize training, recruiting, and retaining talent. Investing in people can help during tough times when workers are most needed, he said.

“At the end of the day, the talent is the value of the company,” Tate said.

Contractors Must Verify Game Plan

Setting pay rates ahead of time and being open with workers and clients is key to avoiding complications, said Dan Parente, the founder of Bookem Danno Productions, an events production and talent booking company in New York City. Companies and workers contracted for events like the Fyre Festival should vet who they’re working for, look at the event’s “game plan,” and demand a deposit before starting the work.

“You can only get so far on a written commitment,” Parente said. “Until there’s a deposit, you can’t do the work.”

Fyre Festival workers, at least in the U.S., have a number of options if they feel they have claims, Tate said. They can seek attorneys or file actions in court themselves, he said. Typically, a company might settle with aggrieved workers, but it’s not clear if the company in this case has money to settle with, he said.

“Here, it’s important to act quickly,” Tate said. “You as an employee might win, but collecting may be an issue here.”

To contact the reporter on this story: Patricio Chile in Washington at pchile@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com; Christopher Opfer at copfer@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

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