Sotheby’s faces class-action lawsuit alleging mistreatment and misclassification of workers

Lawyers for the auction house are trying to dismiss the complaint, which they call 'devoid of factual allegations,' but they could be facing a classic Catch-22.

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Auctioneer Oliver Barker during Sotheby's Macklowe Sale in November 2021 Courtesy Sotheby's

Auctioneer Oliver Barker during Sotheby's Macklowe Sale in November 2021 Courtesy Sotheby's

Last year was a benchmark for Sotheby’s. The auction house consistently smashed records and watched as both younger artists like Flora Yukhnovich and household names like Frida Kahlo soared. They leapt into the future, accepting cryptocurrency for works at a live auction, and with the Macklowe collection sale, proved that mid-century taste still mattered (as long as it has a marquee provenance).

But the year was far from all roses. Since last spring the threat of a class-action lawsuit has loomed over the auction house. The complaint, filed in a New Jersey federal court in March, alleges that Sotheby’s misclassified workers as independent contractors, as opposed to full employees, denied them the benefits that employees are entitled to and violated New York City’s Freelance Isn’t Free Act. The case is a tricky one since the plaintiff, Francis Fenwick, a New Jersey accountant, is making multiple allegations.

Fenwick worked for Sotheby’s from April 2017 to June 2020 as an accountant for the corporate controller’s department. According to court documents, for his first two years at the auction house Fenwick was under contract as an independent contractor. Once those agreements lapsed, he stayed on doing the same work. The auction house’s legal team in November filed a motion to dismiss the case, claiming the complaint against Sotheby’s was “so devoid of factual allegations…it was difficult (if not impossible) to discern”, including the sticky fact that the complaint states that Fenwick was an employee who claims the auction house did him wrong by violating the Freelance Isn’t Free Act.

Fenwick’s lawyer may have found a way around this legal briar patch by asking in a memo filed on 22 December that the court decide whether Fenwick was an employee. If the court finds that he was, then Fenwick and his class-mates, who number over 40, may have been denied all the perks that come along with being a Sotheby’s employee, such as paid vacation and time off, health insurance and worker’s comp, sick days and a retirement plan. If the court decides Fenwick was in fact an independent contractor, a whole different set of allegations comes into play: he claims he was not paid on time, that the auction house tried to pay him less than the agreed-upon sum and that he was retaliated against when he sought payment. Also at issue is the fact that he worked for the auction house last year without a contract.

One way or another, Sotheby’s may have to fight this one out. According to the December memo filed by Fenwick’s lawyer, the auction house is trying to “dismiss the misclassification claims by arguing [he] was an independent contractor, then dismiss the Freelance Isn’t Free Act claims by arguing that the complaint alleges [Fenwick] was an employee.”

The auction house has struggled of late to get cases against it dismissed. In September the Supreme Court of the State of New York denied Sotheby’s attempt to dismiss a case brought by the state’s attorney general Letitia James alleging that Sotheby’s created and used tax exemption certificates that falsely presented a buyer as an art dealer, allowing him to take advantage of a New York law that exempts art dealers from paying sales tax on art purchases if they are adding to an inventory from which they plan to resell.

Fenwick's lawyer and Sotheby's declined to comment, and lawyers for the auction house did not respond to multiple requests for comment. A motion hearing for the suit will be held at the US District Court for the District of New Jersey on 17 January.

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