Beats Electronics, a company that Apple (NASDAQ:AAPL) is rumored to be buying as early as next week, is being sued by a former employee who claims that he was unfairly denied compensation after his company was purchased by Beats in 2012, reports The Wrap. David Hyman sold MOG, an online music subscription service he founded, to Beats Electronics in 2012 for $14 million, reports The Verge.
Although Hyman and many of his employees stayed with the company after it was purchased by Beats in 2012, the MOG founder was fired less than a year later, which prevented him from receiving a substantial equity grant, according to lawsuit documents seen by The Wrap. Hyman is now seeking over $20 million in compensatory damages plus interest.
In court documents obtained by The Wrap, Hyman claimed that he was due to receive 2.5 percent of the company’s “currently outstanding equity interests,” including a 1.0 percent share that would have been paid on his one-year anniversary with the company. The lawsuit also claimed that under the incentive program, Hyman would have received an additional grant of 25 percent of the company’s currently outstanding equity interests if the fair market value of the company hit $500 million or higher.
However, Hyman claims that he was fired before his one-year anniversary with the company for bogus reasons in order to deprive him of his fair share of compensation. Per the court documents, Hyman was dismissed after attempting to fire another employee. Beats Electronics co-founders Jimmy Iovine and Dr. Dre — whose real name is Andre Young — are both named in Hyman’s lawsuit.