- Getty / Dave Kotinsky / Stringer
- On Wednesday, a MoviePass product manager, Eric Jeng, resigned after one year at the company.
- In a 704-word letter sent to the entire company and obtained by Business Insider, Jeng accused MoviePass executives of fostering “such a perilous work environment for their employees.”
- He also said he was “disappointed” in the company’s response to employee allegations of inappropriate conduct. Jeng did not say whom the allegations were against.
- Jeng closed by saying that team morale at MoviePass “worsens and worsens, with no end in sight.”
On Wednesday, as MoviePass staff members settled in to begin work in the new year, they received an announcement in their inboxes from one of the startup’s product managers, Eric Jeng.
In an all-staff email, Jeng resigned from the company after working there for one year.
In the 704-word letter, obtained by Business Insider from several sources, Jeng set out his reasons for leaving, the biggest of which was that he could no longer “in good conscience work for people who foster such a perilous work environment for their employees.”
Jeng said that he was “disappointed” in the company’s response to employee allegations of inappropriate behavior and that MoviePass “leadership chose their own personal friendships over the reputation of the company and the safety of MoviePass employees who have been working so hard to improve the position of our company every single day.”
Though it’s unclear what allegations Jeng was referring to or whom they were against, eight current and former employees previously told Business Insider that a MoviePass marketing consultant, Bob Ellis, had a reputation among some in the company for inappropriate behavior toward female employees.
Four current and former MoviePass employees told Business Insider they believed Jeng was referring to Ellis.
Business Insider reported in December that four formal complaints had been filed with human resources about Ellis’ behavior toward women at the company since he started working for MoviePass in April. A June announcement at an all-hands meeting by MoviePass CEO Mitch Lowe was widely interpreted by staff to mean Ellis was gone, according to five sources who were on the call, but he’d kept popping up at business events. Ellis is good friends with Ted Farnsworth, the CEO of MoviePass’ parent company, Helios and Matheson Analytics, according to three sources.
Jeng wrote in his resignation letter that he “applaud[ed] those who stood up” for what was right, citing “the threat of resignation from certain leaders for MoviePass” and “many formal complaints.”
Business Insider reported in December that three executives threatened to quit in June if nothing was done about Ellis.
“It takes courage to stand up and act for what is right,” Jeng wrote.
Business Insider attempted to contact Ellis by email, phone, and text to comment for this story but did not get a response.
MoviePass declined to comment for this story.
Ellis was at executive functions as recently as early December, when executives from MoviePass and Helios and Matheson appeared together on a yacht in Miami. Khalid Itum, a MoviePass executive vice president, said at an all-hands meeting days after the outing that despite how it looked, “business took place on the boat.”
Jeng said in his letter that the social-media post showing the yacht outing “was not only completely thoughtless, but also incredibly tone deaf.”
Jeng continued: “Our employees are working late hours, sometimes until 1 a.m. and on holidays to build, develop, and release new MoviePass features and products, while fearful of the financial future and stability of the company. It sends an incredibly selfish message to MoviePass employees that members of management are living lavishly and seemingly carefree, with no concern for the company or its employees.”
Jeng also implored MoviePass to get a “functional and qualified HR department.” In November, the two-person human-resources team was fired, leaving the duties to Jake Petersen, a senior vice president at the company.
“When leadership decided to fire our only qualified HR employees, they sent a very clear message that they care very little about employee safety and security,” Jeng wrote. “There currently is no effective outlet for employees to discuss issues about their comfort and safety in the workplace.”
Jeng closed his letter by saying that team morale at MoviePass “worsens and worsens, with no end in sight.”
“It is clear to me that our work environment has become simply too dangerous and toxic, and that we as employees cannot depend on Ted, Mitch, and Khalid,” he wrote.
The unrest comes as Helios and Matheson faces the possibility of being delisted from the Nasdaq, as its stock has not traded above $1 since July. In late December, according to a document filed by Helios and Matheson with the Securities and Exchange Commission, the Nasdaq warned the company it would move to delist it. Helios and Matheson said it would appeal the decision.
As of Friday, Helios and Matheson was still trading on the Nasdaq, at under $0.02.