Christman v. TeraWulf Inc. — Entry #1

Case 6:24-cv-06473 Document 1 Filed 07/31/24 Page 1 of 13


UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NEW YORK
 JOSHUA CHRISTMAN,
 on behalf of himself and all other employees similarly
 situated,
                                                                 CLASS ACTION COMPLAINT
                                            Plaintiff,
             v.                                                  AND DEMAND FOR JURY TRIAL

 TERAWULF INC. and BEOWULF E&D (NY) INC.
                                                                              Civil Action No.
                                           Defendants.                           No. 24-cv-


       Plaintiff Joshua Christman (“Plaintiff”), on behalf of himself and all other persons similarly

situated, (collectively “Plaintiffs”), through his attorney Cordello Law PLLC brings this class

action complaint against Defendants TeraWulf, Inc. (“TeraWulf”) and Beowulf E&D (NY) Inc.

(“Beowulf”) collectively referred to as “Defendants”. Additionally, Joshua Christman brings this

proceeding individually to redress the deprivation of rights secured for damages as a result of

Defendants’ unlawful termination of his employment.

                                 NATURE OF THE ACTION

       1. This lawsuit seeks to recover untimely wage compensation, injunctive relief,

declaratory relief and other damages for Plaintiff and similar hourly workers including but not

limited to: electricians, techs, operations and maintenance workers, (collectively “Manual

Workers”) who work or have worked as Manual Workers for Defendants in New York State.

       2. Plaintiff Joshua Christman worked as a Data Center Operator at Defendants’ Lake

Mariner location in Barker, New York. Throughout his employment, Plaintiff and all other Manual

Workers at Lake Mariner spent more than 25% of their time performing duties that were physical

in nature and were therefore “manual workers” under the New York Labor Law (“NYLL”).


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       3. In 1967, the New York State legislature amended NYLL § 198 to impose “stronger

actions” in the form of liquidated damages to compel employers to comply with the requirements

of Article 6 of the NYLL, including the frequency of payment requirements set forth in Section

191 of the NYLL. These “stronger actions” serve to “compensate the employee for the loss of the

use of money to which he [or she] was entitled,” as is the case with late wage payments, because

an employee loses “the use of money [when] he or she is never paid, partially paid, or paid late.”

Vega v. CM & Assocs. Constr. Mgt., 175 A.D.3d 1144, 1146 n. 2 (1st Dep’t 2019)(citation omitted).

This concept is not new. For decades, the United States Supreme Court has likewise interpreted

the Fair Labor Standards Act, 29 U.S.C. § 201 et seq. (“FLSA”), on which the NYLL is based, as

entitling employees to recover liquidated damages “regardless of whether an employee has been

paid wages owed before the commencement of the action.” Id. (quoting Brooklyn Savings Bank v.

O’Neil, 324 U.S. 697, 707 (1945)).

       4. Defendants violated Section 191 of the NYLL by paying its Manual Workers’ wages on

a biweekly basis. As “manual workers” within the meaning of the NYLL, they should have been

paid “weekly and not later than seven calendar days after the end of the week the[ir] wages are

earned.” NYLL § 191(1)(a)(i).

       5. In this regard, Defendants have failed to provide timely wages to Plaintiff and all other

Manual Workers.

       6. Headquartered in Easton, Maryland, Defendants own and operate a bit coin mining

operation in New York State – Lake Mariner located in Barker, New York.

       7. At all relevant times Defendants have compensated Plaintiff and all other Manual

Workers on a bi-weekly basis.

       8. Plaintiff brings this action on behalf of himself and all other similar Manual Workers in


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New York pursuant to Federal Rule of Civil Procedure 23 (“Rule 23”) to remedy violations of the

NYLL, Article 6, § 191.

        9. Additionally, this is a proceeding for declaratory relief, injunctive relief and monetary

damages to redress the deprivation of rights secured to Plaintiff, Joshua Christman under NYLL §

740, for damages as a result of Defendants’ unlawful termination of Mr. Christman.

        10. This action seeks damages and equitable relief, costs, expenses, expert witness and

attorneys’ fees; restitution to Mr. Christman of all rights, privileges; declaratory and injunctive

relief, including Mr. Christman’s reinstatement to his former position, consequential,

compensatory, punitive damages and a civil penalty of $10,000.

                                  JURISDICTION AND VENUE

        11. This Court has subject matter jurisdiction pursuant to 28 U.S.C. §1332 because there

is diversity of citizenship between Plaintiff and Defendants and the amount in controversy exceeds

$75,000.00.

        12. Venue is proper in the United States District Court for the Western District of New

York pursuant to 28 U.S.C. §1391(b)(2) because a substantial part of the events or commissions

giving rise to the claims occurred in this district.

        13.    Defendants operate and do business in New York State and are subject to personal

jurisdiction in this Court.

        14.    Plaintiff earned on average $64,000 annually ($30.90/hour) and his claim for

liquidated damages pursuant to NYLL § 191 exceeds his annual compensation based on his length

of employment with Defendants. In addition, Plaintiff’s claim for retaliatory termination pursuant

to NYLL § 740 includes back pay, front pay, lost fringe benefits, punitive damages and a civil

penalty of $10,000. In sum Plaintiff’s NYLL claims exceed the amount in controversy limit for


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subject matter jurisdiction.

                                         THE PARTIES

A.      Plaintiff

        Joshua Christman

        15.    Joshua Christman has been employed by Defendants as a Data Center Operator from

June 20, 2022 to June 5, 2024. Mr. Christman job duties include maintaining and installing servers,

running ports, installing shelves, minor repairs and constructions, moving supplies and driving a

forklift.

        16.    During his employment, Mr. Christman worked for Defendants at the Lake Mariner

location in Barker, New York.

        17.    During his employment, over twenty-five percent of Mr. Christman’s duties were

physical tasks, including but not limited to: performing field repairs of electrical equipment and

maintenance on buildings and equipment.

        18.    Despite regularly spending more than twenty-five percent of his shift performing

these physical tasks, Mr. Christman has been compensated by Defendants on a bi-weekly basis.

        19.    For example, for the week beginning May 13, 2024 and ending May 26, 2024, Mr.

Christman was paid his lawfully earned wages on May 31, 2024. See Exhibit A, Christman

Paystub.

        20.    In this regard, Defendants failed to Mr. Christman his wages earned from May 13,

2024 through May 19, 2024 by May 26, 2024 as required by NYLL § 191 (1)(a).

B.     Class Members

        21.    As described in more detail below, Class Members, Plaintiffs or Manual Workers

are those employees of Defendant from July 31, 2018 to the date of judgment who are similarly


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situated to the Named Plaintiff in that they were compensated on a bi-weekly basis and worked for

Defendants in its location in New York State. Consequently, the amount in controversy in this

matter exceeds $75,000 exclusive of interests and costs.

C.       Defendants

         22.    At all times relevant hereto, Plaintiff was an “employee” of Defendants as defined

by the NYLL, § 651.

         23.    At all times relevant hereto, Defendants are “employer[s]” as defined in the NYLL,

§ 651.

         TeraWulf Inc.

         24.    Defendant TeraWulf is a foreign business corporation organized and existing under

the laws of Delaware.

         25.    Defendant TeraWulf’s principal executive office is located, Easton, Maryland.

         26.    Defendant TeraWulf is a publicly traded corporation that owns and operates a bit

coin mining operations including the Lake Mariner location in Barker, New York where Plaintiff

worked.

         27.    Defendant TeraWulf controls and owns Beowulf as detailed in its Securities

Exchange Commission (“SEC”) filing Form 10-K. Specifically, Paul Prager, Chief Executive

Officer (“CEO”) and chairman of the board of directors of TeraWulf controls Beowulf as detailed

in the SEC Form 10-K

         28.    Defendant’s TeraWulf’s employees are engaged in interstate commerce, and their

annual gross volume of sales made or business done exceeds $500,000, exclusive of excise taxes.

         29.    During the course of his employment by Defendant TeraWulf, Plaintiff handled

goods, including equipment and products that moved in interstate commerce.


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        Beowulf E&D (NY), Inc.

        30.    Defendant Beowulf is foreign business corporation organized and existing under the

laws of Delaware.

        31.    Defendant Beowulf’s principal executive office is located in Easton, Maryland.

        32.    Plaintiff’s paystub listed Beowulf as his employer. See Exhibit A, Christman

Paystub.

        Defendants Constitute Joint Employers

        33.    Defendants possess or possessed substantial control over Plaintiffs working

conditions, and over the policies and practices with respect to the employment and compensation

of Plaintiffs, and all similarly situated individuals referred herein.

        34.    Defendants employ or employed Plaintiff and those similarly situated and are or

were Plaintiffs’ employers within the meaning of 29 U.S.C. 201 et seq. and the NYLL.

        35.    As detailed in the SEC Form 10-K Beowulf is owned and controlled by TeraWulf

and pursuant to service agreements performs bit coin mining services at the Lake Mariner bit

mining facility where Plaintiff worked.

        36.    Upon information and belief, Defendant TeraWulf has the right to inspect the

facilities and operations at Lake Mariner and the right to audit all records.

        37.    Upon information and belief, Defendant TeraWulf has the authority to control,

directly or indirectly, the timekeeping and payroll practices of Beowulf Defendants.

        38.    Upon information and belief, Defendant TeraWulf knew or should have known of,

and had the authority to exercise control over, the accuracy of records concerning the hours and

wages of Plaintiffs and similarly situated employees through the monitoring of Beowulf.

        39.    TeraWulf Defendant could have terminated the service agreements of Beowulf


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Defendant and caused Beowul Defendant to cease operations at the Lake Mariner facility under

certain circumstances, including in the event of violations of the law. Thus, upon information and

belief, TeraWulf Defendant has the authority to stop violations of the labor law and, ultimately, to

control the employment of Plaintiffs, including, but not limited to, causing the termination of their

employment. Moreover, TeraWulf Defendant has had the power to induce compliance with

applicable wage and hour law by threatening to terminate a service agreement with Beowulf

Defendant.

       40.    Upon information and belief, TeraWulf Defendant’s profits and financial well-being

depend upon the success of the Beowulf Defendant directly profited from the unlawful wage and

hour practices at the Lake Mariner location.

       41.    TeraWulf Defendant has the power to stop the unlawful wage and hours practices at

its Beowulf Defendant but have not done so.

                       NEW YORK CLASS ACTION ALLEGATIONS

       42.    The NYLL claim is properly maintainable as a class action under Federal Rule of

Civil Procedure 23 (“Rule 23”).

       43.    The Rule 23 class consists of the following:

               All persons who work or have worked as Manual Workers for
               Defendants in New York between July 31, 2018 and the date
               of final judgment in this matter (the “New York Class”).

       44.    The number of putative class members is over 40.

       45.    Plaintiff’s claims are typical of the those claims that could be alleged by any member

of the New York Class, and the relief sought is typical of the relief which would be sought by each

member of the New York Class in separate actions.

       46.    Common issue of law and fact predominate in this action because resolution of


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which to resolve a significant aspect of this litigation in one stroke including, but are not limited

to, the following:

                    Whether Defendants compensated Plaintiff and the New York Class on a timely
                     basis.

          47.        Plaintiff and the New York Class have all been injured in that they have been

compensated in an untimely manner due to Defendants’ common policies, practices and patterns

of conduct. Defendants’ corporate-wide policies and practices affected everyone in the New York

Class similarly, and Defendants benefitted from the same type of unfair and/or wrongful acts as to

each member of the New York Class.

          48.        Further, there are no known conflicts of interest between the Plaintiff and the New

York Class Members. Moreover, the Plaintiff will adequately represent the interests of the class

members because he is similarly situated to the New York Class members.

          49.        Class Counsel, Cordello Law PLLC is qualified and able to litigate the Plaintiffs’

claims.

          50.        The Class Counsel concentrates its practice in employment litigation and is

experienced in class actions arising under wage and hour laws.

          51.        A class action is superior to other available methods for the fair and efficient

adjudication of the controversy – particularly in the context of wage and hour litigation where

individual class members lack the financial resources to vigorously prosecute a lawsuit against a

corporate defendant. Class action treatment will permit a large number of similar persons to

prosecute their common claims in a single forum simultaneously, efficiently, and without the

unnecessary duplication of efforts and expense that numerous individual actions engender.

                               NEW YORK LABOR LAW § 740 ALLEGATIONS

          52.        As discussed further herein, Defendants summarily terminated Mr. Christman based

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upon his objections to Defendants’ unsafe work conditions which reasonable believed posed a

specific and substantial danger to public safety and health.

Mr. Christman Objects to Defendants’ Unsafe Work Conditions

          53.    On December 28, 2023 and then again on January 24, 2024 Mr. Christman met with

Defendants’ Plant Manager Dan Heidmann to discuss his workplace safety concerns and threats

of violence made by his direct supervisor Data Center Supervisor Greg Miller. For example, Mr.

Christman complained about significant Occupational Safety Health Administration (“OSHA”)

violations including the lack of training for operating Defendants’ 30-foot bucket truck, having

employees jump in dumpsters to pack down garbage, as well as Supervisor Miller’s threats of

physical violence towards employees.

          54.    In May 2024 Supervisor Miller confronted Plaintiff Christman that he should not be

documenting safety violations for OSHA. Mr. Christman denied that he was bringing safety issues

to OSHA and instead maintained that he was documenting them for the Defendants’ safety

meeting. Supervisor Miller threatened to “beat up” Mr. Christman and “kick his ass” and “take

him out to the stones” if he disclosed safety violations to OSHA. Shortly thereafter Mr. Christman

was terminated.

Defendants Terminate Mr. Christman

          55.    On June 5, 2024 Mr. Christman was terminated based on multiple violations of

company policies, specifically unauthorized recording of a meeting on May 30, 2024.

          56.    Mr. Christman’s termination was in retaliation for what Defendants knew or

believed to be his protected activity of objecting to Defendants’ workplace safety violations which

Mr. Christman reasonably believed posed a substantial and specific danger to public health and

safety.


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Mr. Christman Engaged in Protected Activity Under N.Y. Labor Law § 740 By Objecting to
Defendants’ Unsafe and Dangerous Practices

         57.    Mr. Christman objected to Defendants’ unsafe work conditions and threats of

physical violence by his direct supervisor which Mr. Christman reasonably believed posed a

substantial and specific danger to public health or safety.

         58.    Mr. Christman afforded Defendants a reasonable opportunity to correct these unsafe

condition, but Defendants failed to do so.

         59.    By raising these concerns, Mr. Christman engaged in protected activity under NYLL

§ 740.

Defendants Improperly Terminated Mr. Christman

         60.     Defendants’ termination of Mr. Christman violates NYLL § 740. Mr. Christman

received an average rating on his annual performance evaluations and standard bonuses and never

received any written disciplinary warnings during his tenure with Defendants. However, after he

objected to Defendants’ unsafe work conditions and threats of physical violence he was summarily

terminated. Moreover, the timing of his termination indicates Defendants retaliated against Mr.

Christman because he continued to disclose what he believed to be a substantial and specific

danger to the public health and safety.

         61.    Defendants for the first time when it terminated Mr. Christman informed him that

he had been issued a written disciplinary warning. However, Mr. Christman never received this

written disciplinary warning and requested a copy of the written warning. To date Defendants

have failed to produce this written warning.

         62.    Thus, Defendants improperly discharged and retaliated against Mr. Christman

because of the lawful acts he had taken under NYLL §§ 740.

                                               COUNT I


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               Violation of the New York Labor Law § 191 - Frequency of Payments

       63.    Defendants are an employer that is subject to and must abide by the frequency of

payments provisions of the NYLL.

       64.    Defendants paid Plaintiff and the New York Class on a biweekly basis.

       65.    In the last six years, Plaintiff and the New York Class spent more than 25% of their

working time performing work tasks of a physical nature.

       66.    Plaintiffs and the New York Rule Class are “manual workers” within the meaning

of NYLL § 191(1)(a)(i).

       67.    By paying Plaintiff and the New York Class on a biweekly basis, Defendants paid

Plaintiff and the New York Class their wages due “later than seven calendar days after the end of

the week in which the wages were earned.” N.Y. Lab. L. §191(1)(a).        Defendants violated the

NYLL by failing to compensate Plaintiff and the New York Class consistent with the minimum

wage provisions.

       68.    Because Defendants failed to pay Plaintiff and the New York Class on a weekly

basis, they are entitled to recover liquidated damages equal to the full amount of their wages paid

later than seven days after the end of a workweek in each biweekly period within the six years

prior to the filing of this Complaint.

                                                  COUNT II

                         Violation of New York Labor Law § 740 - Retaliation

       69.    Mr. Christman objected to Defendants’ unsafe work conditions and OSHA

violations threats of physical violence which he reasonably believed posed a substantial and

specific danger to the public health or safety.

       70.    Mr. Christman objected to, refused to participate in and or/threatened to disclose


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Defendants’ unsafe activities.

       71.    Mr. Christman afforded Defendants a reasonable opportunity to correct the danger

to public health or safety, but Defendants failed and refused to do so.

       72.    In retaliation for Mr. Christman disclosures and objections, Defendants retaliated

against him by terminating him in violation of New York Labor Law § 740.

                                      PRAYER FOR RELIEF

       WHEREFORE, Plaintiff and the New York Class pray for judgment against Defendants as
follows:

               (a)     Certification of this case as a class action pursuant to Rule 23 of the Federal
                       Rules of Civil Procedure;

               (b)     Designation of Plaintiff as representative of the Rule 23 Class and counsel
                       of record as Class Counsel;

               (c)     An order preliminarily and permanently restraining Defendants from
                       engaging in the aforementioned pay violation;

               (d)     Liquidated damages permitted by law pursuant to the NYLL;

               (e)     An award of reasonable attorneys’ fees and costs;

               (f)     An award of pre- and post-judgment interest;

               (g)     An injunction reinstating Plaintiff to his prior position with the same
                       seniority status, fringe benefits, and other terms and conditions of
                       employment that Plaintiff would have had but for defendant’s retaliatory
                       acts;

               (h)     An injunction permanently restraining Defendants from engaging in the
                       aforementioned retaliation;

               (i)     A declaration that Defendants’ conduct complained of herein violated
                       Plaintiff’s rights as secured by the NYLL;

               (j)     An award to Plaintiff in an amount equal to the amount of back pay,
                       including lost fringe benefits and bonuses, with interest, that Plaintiff would
                       have earned but for Defendants’ retaliatory acts;

               (k)     An award to Plaintiff of all compensatory and consequential damages,
                       including the value of Plaintiff’s unpaid wages and bonuses;
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              (l)      An award to Plaintiff of the actual losses sustained by Plaintiff as a direct
                       result of Defendants’ violations;

              (m)      An award to Plaintiff of front pay, punitive damages and a civil penalty of
                       $10,000; and

              (n)      Such other and further legal or equitable relief as this Court deems to be just
                       and appropriate.


                                        JURY DEMAND

       Plaintiff demands a jury to hear and decide all issues of fact in accordance with Federal

Rule of Civil Procedure 38(b).

Dated: July 31, 2024

                                                        CORDELLO LAW PLLC

                                                By:     /s/ Justin M. Cordello_____________
                                                        Justin M. Cordello, Esq.
                                                        Attorney for Plaintiff
                                                        200 Anderson Avenue
                                                        Rochester, New York 14607
                                                        Telephone: (585) 967-7707
                                                        [email protected]


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