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Fired Peloton trainer files lawsuit alleging hostile working environment

Peloton lays off 500 more employees
MoneyWatch: Peloton lays off 500 more employees in push to "save" company 05:10

A former Peloton instructor is suing the personal fitness company for $1.8 million, alleging he was wrongly dismissed and that it created a hostile work environment. 

The lawsuit, filed Wednesday in New York State Supreme Court on behalf of Daniel McKenna, also accuses Peloton Chief Content Officer Jennifer Cotter of directing ethnically offensive remarks at McKenna, who is Irish.

More specifically, the complaint cites one instance in which Cotter introduced Peloton CEO Barry McCarthy to the fitness instructors. In McCarthy's presence Cotter turned to McKenna and said, "I hope you're not drunk Daniel," the lawsuit alleges. 

McKenna told Cotter after the meeting that the "alcohol-related stereotypes embarrassed him" but Cotter didn't apologize and instead said she was just joking, the complaint states. 

Peloton, which hires dozens of trainers to lead online cycling classes, didn't immediately respond to a request for comment. Lawyers representing McKenna declined to comment. 

Peloton loses speed

Peloton's business flourished during the early days of the coronavirus pandemic as many Americans, stuck at home, bought the company's exercise bikes and treadmills and subscribed to its online fitness clases. Peloton's revenue shot up from $915 million in 2019 to $1.8 billion in 2020, and then kept climbing to $4 billion last year. Its stock price soared to more than $180 per share. 

But more recently Peloton has struggled as pandemic restrictions eased, while its growth slowed. Co-founders John Foley and Hisao Kushi stepped down last month amid the company's efforts to trim costs. Sales at Peloton fell 11% during its most recent fiscal year, while its losses ballooned to $2.8 billion. The company announced four rounds of layoffs this year — including 800 employees in August and another 500 last week. 

McKenna, who joined Peloton in December 2020, quickly became a popular trainer on the platform, but tore a tendon in his pectoral muscles this spring and needed surgery, according to his lawsuit. He went on disability to recover from surgery and returned in May, court documents state. 

The suit accuses Cotter of telling McKenna that his employment was in jeopardy because he had taken disability leave. His lawyers argue that McKenna was allowed to take the leave under New York State law because he was a full-time Peloton employee. McKenna taught his last Peloton class on September 11 and was let go the next day, according to the suit. 

"Mr. McKenna repeatedly requested that Peloton provide a written basis for his termination and no detailed, descriptive or factual explanation was provided," the lawsuit states. 

McKenna is suing Peloton for disability discrimination, breach of contract and retaliation. He is seeking $300,000 in pain and suffering damages, $500,000 in back and front pay, as well as $1 million in punitive damages.

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