Lifestyle Publications Hit with Class Action that Challenges Alleged Ad Revenue-Based Compensation Structure

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A former Lifestyle Publications magazine publisher has filed a proposed class action in which he challenges the company’s allegedly unlawful compensation structure.

Lifestyle Publications, the suit says, distributes locally-focused “lifestyle” magazines to homes and businesses across the country. Employees such as the plaintiff, the case explains, are brought on nationwide to handle publishing, with the expectation that they sell ad space to local businesses and professionals.

The 21-page lawsuit, which has been removed to California’s Southern District, states the defendant charges its publishers a non-refundable start-up fee upon the beginning of their employment. The plaintiff, who the case says worked for the defendant from February through September 2018, claims that employee publishers are not paid by Lifestyle Publications until advertising revenue from a particular magazine issue exceeds what it cost to print and distribute the issue. Moreover, the lawsuit claims the defendant “unilaterally” changes its compensation structure for employee publishers without notice, which the plaintiff argues makes it more difficult for proposed class members to earn compensation. According to the case, Lifestyle Publications “essentially retains all advertising revenue for itself,” without breaking down costs and revenue for each magazine issue, making it impossible to determine the accuracy of print costs and revenue. 

Further, the plaintiff claims the defendant charges employee publishers costs that usually exceed the advertising revenue brought in each month. As a result, the complaint alleges, many employees like the plaintiff received no wages at all from the defendant despite regularly clocking more than 60 hours per week.

In the event the ad revenue for a particular issue fails to hit the mark, Lifestyle Publications, the suit claims, charges employee publishers for the difference without reimbursement. From the lawsuit:

“When Defendant LIFESTYLE believes that advertising revenue for a particular magazine is insufficient, Defendant LIFESTYLE requires the Employee Publisher to pay the difference to Defendant LIFESTYLE immediately in order to publish the magazine on time. Considering the Employee Publishers have developed business relationships with their advertisers, they have no choice but to pay the additional fees demanded by Defendant LIFESTYLE in order to maintain the magazine’s viability. As a result, many Employee Publishers, including Plaintiff LOWE, not only received no compensation from Defendants, but also had to pay additional funds to Defendant LIFESTYLE for purported excess ‘costs’ that exceeded revenue, for which they were provided no documentation.”

The lawsuit can be read below.