Paradigm Pushes for Arbitration in Debbee Klein Dispute

Sam Gores and Debbee Klein - Getty - Split - H 2020
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Paradigm has hit back at former agent Debbee Klein's legal allegations with a detailed declaration of denial and a motion to compel arbitration.

The veteran literary rep was among the 200-plus laid off March 20 as part of Paradigm's attempts to grapple with the industry shutdown caused by the novel coronavirus pandemic. She filed a $2 million wrongful termination suit a week later in which one of the most sensational claims was that chairman and CEO Sam Gores had used Paradigm funds to pay for prostitutes. According to Klein's lawsuit, this was relayed to her by Gores' former longtime assistant, who had been laid off earlier this year.

Paradigm's motion, filed this morning by Kinsella Weitzman in California's Superior Court, includes a declaration from the ex-assistant disputing those allegations. "Because I was stunned and angered by the clearly false accusations in paragraph 16 of Klein's complaint, I immediately reached out to Sam and told him that no such conversation had ever taken place between me and Klein," wrote the assistant, whose name was redacted from the filing. "In the approximately 18 years I worked with Sam at Paradigm, he never once asked me to procure a prostitute for him or anyone else."

In her lawsuit, Klein also claimed that Gores asked her to lend $500,000 of her salary to help defraud the agency's bank. "This allegation is nonsense. Paradigm has always been fully transparent with its lenders," the filing said. "Moreover, the idea that $500,000 in Klein's salary alone would have made any meaningful difference to Paradigm's lenders is implausible to say the least."

What's more, Paradigm's filing casts Klein as a "serial office bully" whose conduct drove at least four agents, including one who accused her of sexual harassment, to quit the company.

"Klein's growing difficulty getting along with other employees was one of the many reasons Paradigm hesitated in accepting Klein's ever increasing list of demands during her recent negotiations," the filing said. "Although Klein was a successful agent, she is definitely not a team player or supportive colleague."

The lengthy filing said that Klein's "allegations of supposedly illegal conduct are pure fabrication designed to humiliate Gores and Paradigm and extort a lucrative settlement" and concluded with multiple attachments of the various Paradigm employee handbooks — signed by Klein — over the years, which have stated that personnel without written contracts are employed at will and are obliged to settle disputes in arbitration.

"This is as straightforward a Motion to compel arbitration as they come," the filing read. "Paradigm is abiding by the terms of its arbitration clauses with Klein, and contemporaneous with this Motion, is filing a JAMS arbitration demand seeking several million dollars in damages against Klein for breach of the confidentiality and non-disparagement provisions in her 2015 employment agreement."