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Popular professional networking group, former president embroiled in suit

Kris Olson//May 23, 2019//

Popular professional networking group, former president embroiled in suit

Kris Olson//May 23, 2019//

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A local organization launched to foster professional collegiality is now embroiled in a bitter and potentially internecine legal battle between its founder and its first president.

As of early 2018, it seemed like both sides agreed: At year’s end, David L. Yas would walk away from USA 500, the networking organization he had spent the previous three years helping principal owner Joseph Chatham get off the ground.

But by late summer 2018, Chatham had fired Yas. In February, Yas sued Chatham and his organization, alleging Wage Act violations and other claims his attorney says could all but bankrupt the organization.

yas-and-chathamChatham and USA 500 responded by filing counterclaims against Yas, saying he breached his duty of loyalty as an owner and shareholder of the company.

Beyond their legal claims, the parties’ filings paint a portrait of a once-fruitful partnership that by the end had deteriorated beyond repair.

On one level, the Norfolk Superior Court suit is about commissions that Yas believes he is due under the terms of his 2016 contract.

But, on another level, the case seemingly results from each side feeling the other fails to appreciate how much they contributed — and how much they tolerated.

Compared to lifelong Massachusetts resident Yas, Chatham is a relative newcomer to the Boston area. He arrived around 2011 to help a similar fee-based networking organization, ProVisors, break into the New England market.

Yas claims Chatham, whom he met through ProVisors, prized his Rolodex, which had been built over the course of a 15-plus-year career as editor and publisher of Massachusetts Lawyers Weekly, and a subsequent career as a financial advisor in Boston.

Yas’ network of contacts became only more valuable when, in fall 2013, Chatham decided to break from ProVisors and launch a competing organization, USA 500, named for its initial goal to get 500 members in the Boston area.

Chatham enlisted Yas and seven other ProVisors group leaders to get the new company off the ground, but Yas was the only one to make it onto the payroll.

Yas worked for a few months at the end of 2015 on a commission-only basis, then began drawing an annual salary of $75,000 plus commissions on Jan. 1, 2016.

Yas’ complaint calls his first 15 months as a USA 500 employee a “complete success,” with the organization adding approximately 180 members and growing to about 15 chapters.

In his answer, Chatham paints a far less rosy picture of that period, saying that he and his wife, Lisa, who worked for USA 500 in an administrative capacity, had grown “extremely frustrated by Yas’ work habits.” Specifically, they said he consistently failed to perform key administrative tasks, like having prospective members register and fill out profiles.

Yas says he never got feedback about his performance, but Chatham claims he learned quickly that providing it would be “futile.”

“Yas typically had an excuse, or blamed someone or something else,” he writes.

Moreover, Chatham alleges he was hearing regular complaints about Yas’ “loose and casual style of dealing with members, issues, sometimes borderline humor, and sometimes even misogynistic behavior that made certain women in the organization uncomfortable.”

One member said she and other women felt Yas “set an inappropriate tone for the organization” and gave it a “fraternity feel,” according to Chatham’s answer.

Chatham says that at the end of 2016, he and fellow co-owner Jeffrey M. Rosin, a friend of Yas’ since college, went to Yas to acclimate him to the idea that 2017 might be his last as a USA 500 employee. They instead encouraged him to envision a future as the independent head of USA 500’s Connecticut franchise, which they would even give him a head start on building out during the remainder of his time as an employee.

Chatham says he also restructured the formula to calculate Yas’ commissions, as he feared his vision of an organization diverse by race, gender and professions represented was “going unfulfilled.”

But those best-laid plans failed to come to fruition. In 2017, Yas’ “lack of administrative follow-up” remained a problem, as did the tone he was setting for the organization, according to Chatham’s answer.

Yas “seemed detached,” and membership was lagging, not just in the fledgling Connecticut territory but elsewhere, according to Chatham.

As the end of Yas’ 2017 contract approached, Chatham says he was reluctant to re-up with Yas but relented at the other owners’ request.

While Chatham attributes Yas’ shaky job status to his performance, Yas offers another theory: Chatham had milked Yas’ professional network for all it was worth and now had no further use for him.

“Evidently, Chatham’s plan was to phase Yas out of the business that he had helped grow to approximately 500 members in under three years,” Yas’ complaint reads.

Moreover, clearing the books of Yas’ salary might allow Chatham, whose salary had already climbed from $145,000 to an estimated $432,000 in 2018, to retain more of USA 500’s profits, Yas alleges.

Despite the friction that had developed, Yas says he was able to extract a literal handshake deal that he would not be fired at a March 2, 2018, meeting of the members. Chatham not only denied efforts to marginalize and ostracize Yas but responded to a question about whether he intended to fire Yas by shaking Yas’ hand and assuring him, “I’d never do that to you,” according to Yas’ complaint.

Months later, Yas was gone.

Chatham says Yas had essentially “checked out” and either blew off or did the bare minimum at various USA 500 events. At the same time, he was focusing far more of his energies on launching his new venture, the Boston-based podcasting company POD 617.

Given where the relationship stood by the summer of 2018, it is perhaps unsurprising that discussions about paying Yas severance went nowhere.

Since his separation from USA 500, Yas says he has learned additional disturbing information about Chatham. He alleges that Chatham badmouthed him to a candidate for an administrative office position, whose husband Yas knew, thereby violating the mutual non-disparagement clause in his contract.

Chatham also allegedly gained unauthorized access to Yas’ personal email account and read and forwarded several emails to one of his attorneys, Daniel C. Reiser, forming the basis for Yas’ claim for a violation of the Electronics Communications Privacy Act.

Yas’ lawyer, Newton’s Charles F. Rodman, thinks his client has significant enough claims — particularly under the Wage Act — to threaten USA 500’s viability.

In Rodman’s telling, Yas’ 2016 contract with USA 500 entitled him to a $500 commission for each new member he signed up, not just in their first year but each time those members reupped their annual $1,800 dues for as long as they remained members.

Multiply $500 in commissions on renewals for 150 or more members recruited by Yas in 2016 for each of the years since, then triple that sum as provided under the Wage Act, then add interest and costs, and you quickly approach the $920,000 in annual revenue that USA 500 projected in February 2018, Rodman notes.

It may turn out to have been far more cost-effective just to pay Yas the $40,000 or so he was due for the balance of 2018, after which Yas was fully prepared to walk away, Rodman says.

In his seven-count complaint, Yas also alleges that Chatham retaliated against him for engaging in “protected conduct” in the form of complaining — accurately — about errors in the way his commissions had been calculated.

In another form of alleged protected conduct, Yas lobbied for he and other USA 500 “group facilitators” to be paid for their services. Beginning around Sept. 1, 2018, USA500 began compensating Yas at the minimum hourly wage rate for work as group facilitator but has not provided him back wages, his complaint notes.

Unsurprisingly, the defendants’ attorney, Matthew J. Fogelman of Newton Center, disagrees with Rodman’s assessment of the case.

“We believe that these claims are without merit, and we are quite confident that a court would agree,” he says.

USA 500 is also seeking declaratory relief to allow the company to divest Yas involuntarily of his shares under the company’s amended operating agreement.

Rodman stresses Yas’ lawsuit should not be taken as any sort of indictment of “a lot of very decent people” who comprise USA 500.

“But this owner and ownership group, at a time when David most needed support and some kind of sympathy and human empathy, he didn’t get it,” he says.

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