Pocket FM’s Legal Drama: Why US Contractors Are Suing The Startup

Pocket FM’s employees and contractors are not very happy with the company.

In the past three months, several former employees have alleged that the entertainment startup’s toxic work culture is taking a huge toll on employees. Social media is rife with posts about employees in the company’s Indian offices who claimed to have been sacked without adequate notice.

And it’s not just employees in India complaining on social media. Inc42’s months-long investigation into the Bengaluru-based startup (with a parent entity in the US) has unearthed several issues at Pocket FM, including unhappy former contractual workers in the US, who have dragged the company to court. 

As per multiple lawsuits filed against Pocket FM Corp in the US, the company is facing a potential class action lawsuit, even as nearly 80% of its revenue comes from the US.  At least 11 “independent contractors” have alleged that Pocket FM circumvented a number of US statutes and laws related to the classification of workers, wage provisions and working conditions. 

At the heart of these multiple complaints is the fact that Pocket FM has created a contractual trap and is deliberately misclassifying employees, not providing minimum wages, payroll records or severance pay upon termination and more. 

Many of the plaintiffs in the US allege wrongful termination, failure to provide rest and meal periods, as well as retaliation from Pocket FM over raising these concerns. 

Responding to Inc42, Pocket FM said the allegations are baseless and denied that there were any discrepancies in the hiring process of contracted workers in the US.

The company also said that in the content and entertainment industry, it is routine practice to engage contracted workers for short-term projects, but several former employees that we spoke to claim the company’s hiring policies is often opaque and does not hint at the short-term nature.

In many cases, employees in India have alleged that contracts are terminated well before a project ends and workers are left jobless without much notice. 

But the fact is that the lawsuits could snowball into a major problem for Pocket FM, which earned close to $100 Mn in revenue from the US in FY24, according to CFO Anurag Sharma. 

Given the revenue dependency on the US, the class action lawsuit against Pocket FM from former contractors could have very real implications on future growth.

However, beyond this, the allegations of a toxic workplace and aggressive deadlines for creative work has built a negative perception among creative professionals, many of whom have lashed out on social media and those with the option to sue the company have done so. 

Pocket FM’s US Revenue Machine

Founded in 2018 by Rohan Nayak, Nishanth KS and Prateek Dixit, Pocket FM began as an audio entertainment platform, serving episodic content across multiple languages and genres, including romance, drama, thriller, fantasy, science fiction and other categories. 

For the first few years, the company’s focus was entirely on the Indian market, and in the early years, Pocket FM spoke about creating a new category in India for audio series, built around micro-transactions as a monetisation model. 

The company stuck to its India focus till 2023, when it entered the US market after raising $65 Mn in 2022 from Goodwater Capital, Naver and Tanglin Venture Partners. And this completely changed the revenue complexion for Pocket FM, as we can see below. 

Clearly, the US entry worked out swimmingly for Pocket FM and one could even say that its microtransaction strategy was always expected to work better in the US, where the per capita income is higher and where there is already a large podcast consumption market. 

Pocket FM claimed that its global revenue soared 496% to INR 1,051.97 Cr in FY24 and it reported a 68% jump in its top line in FY25 as well, though this could not be independently verified. 

Besides user-generated content and buying rights to other properties, Pocket FM has a team of in-house contractors that develop fresh storylines and properties for its audio series. This approach guaranteed the most amount of creative control. It gave contractors a fixed set of story lines to develop and only kept them on board for the duration of the content creation. 

Once a particular series or story line is exhausted, these workers can part ways with Pocket FM, without needing to resign or submit a notice. 

Recently, the company has brought in AI to create content as well. Commenting on its FY25 financial results, Pocket FM’s cofounder and CEO Nayak told ET that it managed to trim down its content cost by 2-3X on the back of AI. The company further added that its AI-based shows have already generated more than INR 50 Cr in revenue.

When asked about the impact of AI on the human workforce at the company, a company spokesperson told Inc42, “I don’t believe in AI replacing any function. I think what we are doing is we are working with AI. So, we are putting human creativity and AI together to be built.”

Who Are Pocket FM’s Contractors?

Pocket FM hires promo writers, creative directors, in-house writers and several other creative professionals on a contractual basis, with the tenure of the contract being determined by the company’s content slate. 

For instance, if Pocket FM decides to make a show with 100 episodes, it will hire enough contractors to complete this project. Whether it retains these contractors for more than one show is not clear, but this is completely at the discretion of the management. 

However, in case the project fails to gain traction or listeners after the first few episodes, the company can unilaterally decide to halt further production, resulting in contractors being asked to move on, or shifting them to other projects. 

This revolving door strategy for hiring clearly worked in India where the laws are not clear on contracted workers’ rights (as evidenced by the gig economy issues) and where any potential legal action against companies is likely to take years to be heard by the courts. 

A number of former contracted workers told Inc42 about the unsaid rule at Pocket FM — your job could be gone overnight. Indeed, that’s the content of the Reddit post from early May 2025, for example.

The Allegations Against Pocket FM Management

As far as the US is concerned though, the labour laws are far more stringent and offer clarity to employers that is lacking in India in many cases. And it’s for this reason that close to a dozen contractors have sued the company.

Benjamin Waller, one of the contractors suing the company, has also alleged that he repeatedly challenged Pocket FM management on instances of discrimination based on race, sexual orientation, immigration status, physical appearance, and gender, including broader issues of sexism and misogyny, but were never provided any resolution. 

In another complaint, a former contractor Shyan Pawl claimed that the company’s employees in India passed “several racist remarks” when discussing the outline of a show which featured a black female lead.

As per filings by the attorneys of the 11 individuals, the size of the class can go up to 500 individuals in the US alone. It’s not clear how many such employees have joined the class since these initial suits were filed by some contractors in November 2024. 

The Morning Context was the first one to report on these allegations last month.

The allegations also state that Pocket FM had the authority to hire and terminate contractors, as well as set work rules governing their employment. Besides, Pocket FM also created calendars for daily tasks, compelled contractors to attend training sessions, and controlled the work hours and work product during these hours.  Some were even tasked with hiring other contractors. 

Explaining the situation in the US, Pocket FM’s legal spokesperson once again denied the allegations and established a difference between ‘full-time employees’ and ‘independent contractors’. Here is what the company claims:

• No Login or Logout Time: Pocket FM claims that contractors are free to login and logout as per their will. They are expected to submit the assigned work within the designated deadline.
• No Leave Policy:  Pocket FM claims there is no leave or break policy for contractors as they “dictate their own schedule”
• Notice Period: As per the company, if the contract is shelved before its terminating date, the contractor receives a prior notice
• Lunch And Breaks:  The company doesn’t specify lunch or break times for contractors as they are free to work as per their will.

“At Pocket FM, very strict care is taken to ensure that contractors are free to control their own work and the manner of performance of their work,” the company’s legal spokesperson added.

In all likelihood, the outcome of this case will rest on whether the court decides that Pocket FM deliberately misclassified workers to mitigate hiring costs in the US and to make it easier to remove these workers.  

Is There A ‘Contractor Trap’ At Pocket FM?

Pocket FM is no stranger to cutbacks and layoffs. The company has had multiple waves of layoffs and reorganisation over the past 16 months. First, it let go of more than 150 contracted workers in 2024. In the first month of 2025, the company again parted ways with more than 75 employees as a part of its “restructuring exercise”

“We would not use that word layoff with respect to contractors; that’s really a term that’s typically used for termination of employees,” the legal spokesperson added.

Former employees or contracted workers allege that this is a deliberate tactic to cover up for the fact that Pocket FM has a revolving door for employees and workers. 

“Hiring employees on 3 or 6-month contracts is a tactic used by the company to hide any buzz about termination and to show that the company is hiring all the time,”one terminated employee told Inc42.

The ‘contractor trap’, as this is called by many, is said to be exploiting individuals by making them work over time with tight deadlines and then declining job security. This is not just the case in India, but also at the heart of the lawsuits filed in the US. 

Denying this allegation, Pocket FM’s legal representative told us, “Any contract with anybody that has a fixed term stipulated in the contract, it comes to a natural end upon the completion of that term and usually no notice is required.”

Multiple contractors claimed they were let go without any prior notice.

“Giving a notice when you terminate any contract — whether freelancers or employees or even a business partner or a vendor — is business courtesy. That’s a part of every agreement and certainly that is followed at Pocket FM,” the representative added. 

What is not clear right now is how many such contractors make up the workforce for Pocket FM at the moment. While Pocket FM declined to comment on the total number of employees and contractors working in the company, a source mentioned that the total workforce is more than 3,000.

The same sources also alluded to the fact that more than half of Pocket FM’s content was created by independent creators, and by arbitrarily deciding their engagement with the company — at least in the US — the risk of a legal backlash is real. 

Meanwhile in India, former employees and contractors call Pocket FM an example of ‘employment failure’.

“This isn’t flexibility. It’s calculated imbalance, designed so that the company gets everything, and the worker gets nothing,” said another Reddit post. 

While those in the US have taken the legal route to fight back, the situation is far more bleak for contractors in India. 

Update: The story has been edited to include credit for The Morning Context

[Edited by Nikhil Subramaniam]