The main Hibu class action lawsuit is Pasno et al. v. Hibu Inc., a California employment case brought by three former sales representatives who alleged the digital marketing company failed to reimburse business expenses, pay overtime, and issue accurate wage statements. It settled for $140,000, and a Los Angeles Superior Court judge granted final approval on September 15, 2023. A separate shareholder suit against the British parent, Levien v. Hibu PLC, was dismissed in 2020 on forum grounds. No consumer class action over Hibu’s marketing services has surfaced in court records.
The California Employment Case
On January 12, 2022, Joel Pasno, John Kuntz, and Rodella Hurtado filed a class action complaint in the Superior Court of California, County of Los Angeles (Case No. 22STCV01361).1PlainSite. Joel Pasno et al. v. Hibu Inc. Represented by attorney Julian Hammond, they sued on behalf of everyone Hibu employed in California as account representatives, account executives, digital account executives, or other non-management sales representatives between January 12, 2018, and December 13, 2022.2Phoenix Class Action. Pasno v. Hibu Inc. Final Approval Order
The complaint raised six causes of action under California law:
- Failure to reimburse necessary business expenses under Labor Code § 2802.
- Failure to pay overtime wages required by Labor Code §§ 510 and 1194.
- Failure to timely pay all compensation owed at discharge, under Labor Code §§ 201–203.
- Failure to provide accurate itemized wage statements as required by Labor Code § 226(a).
- Unfair business practices under Business and Professions Code §§ 17200 et seq.
- Civil penalties under the Private Attorneys General Act, Labor Code § 2699.
The settlement also resolved claims from a related federal case, Lori Cruz v. Hibu Inc. (Case No. 2:22-cv-00959, E.D. Cal.), which had alleged unpaid initial sales training during employees’ first three weeks and unreimbursed business expenses.2Phoenix Class Action. Pasno v. Hibu Inc. Final Approval Order
How the $140,000 Was Divided
The gross settlement of $140,000 was allocated this way:2Phoenix Class Action. Pasno v. Hibu Inc. Final Approval Order
- Attorneys’ fees of $46,666.67, or one-third of the gross settlement.
- Litigation costs of $10,393.25.
- Service awards of $5,000 to John Kuntz and $2,500 each to Joel Pasno and Rodella Hurtado.
- PAGA penalties of $5,000 total, split 75 percent to the California Labor and Workforce Development Agency and 25 percent to aggrieved employees.
- Settlement administration costs of $6,800, paid to Phoenix Settlement Administrators.
Hibu had to fund the full amount within 15 business days of the effective date, and the administrator had 30 business days after that to distribute individual payments. Uncashed checks were to be donated after 180 days to Bet Tzedek, a legal aid organization named as the cy pres beneficiary. Only one class member, David Song, opted out.2Phoenix Class Action. Pasno v. Hibu Inc. Final Approval Order
The Shareholder Case Against Hibu PLC
A separate class action, Levien v. Hibu PLC (Civil Action No. 19-3239), was filed in the U.S. District Court for the Eastern District of Pennsylvania by shareholders Thomas Levien and James Westhead. They alleged that leadership of the Yell/Hibu group made “unrealistically optimistic” financial projections while concealing that the company’s strategy to shift from print to digital advertising had failed. The complaint further alleged that Hibu leadership rejected acquisition offers for the American subsidiary, Yellowbook, at $1.6 billion and $1.9 billion without disclosing them to shareholders, and then moved assets and used accounting maneuvers to push the company into administration.3vLex. Levien v. Hibu PLC, 475 F.Supp.3d 429
Because Hibu plc was a British company and the alleged misrepresentations concerned British financial disclosures, the claims were brought under British law: common-law deceit, fraudulent misrepresentation under the Misrepresentation Act of 1967, a violation of the Financial Services and Markets Act of 2000, and negligent misstatements under common law.3vLex. Levien v. Hibu PLC, 475 F.Supp.3d 429
On July 27, 2020, Judge Michael Baylson dismissed the case with prejudice under the doctrine of forum non conveniens, holding that England was the proper forum. The court did not reach the merits or personal jurisdiction. The plaintiffs appealed to the Third Circuit (Case No. 20-2731); the docket shows a final order entered on February 22, 2022, with no indication the dismissal was reversed.4CourtListener. Levien v. Hibu PLC Docket
What About a Consumer Class Action?
Small business owners who bought Hibu’s digital marketing services have filed a steady stream of complaints, but none has produced a certified consumer class action. Hibu’s Better Business Bureau profile lists 115 complaints over a three-year period, with 37 in the most recent twelve months. The most common categories are order issues, service or repair issues, and sales and advertising disputes.5BBB. Hibu Inc. Complaints
Recurring grievances describe campaigns that generate few legitimate leads relative to spending. One business owner reported paying nearly $29,000 for nine genuine leads, with the rest being spam. Another described going from a $53,420 annual profit to a $30,552 loss while Hibu managed their marketing.5BBB. Hibu Inc. Complaints A ConsumerAffairs reviewer reported spending $6,400 over four months for three leads.6ConsumerAffairs. Hibu Reviews Cancellation difficulties also come up often, with complainants saying Hibu requires phone cancellations, that the right department is hard to reach, and that charges continued after explicit cancellation requests.
Hibu’s current public terms and conditions do not appear to contain a mandatory arbitration clause or class action waiver, which in theory leaves the courthouse door open for consumers who believe they have been harmed.7Hibu. Digital Products and Services Terms and Conditions No consumer class action alleging deceptive marketing practices has been identified in court records as of this writing.