TaskUs, Inc. Shareholders Partially Beat Defendants’ Motion to Dismiss the Class Action Complaint
On January 5, 2024, U.S. District Judge John P. Cronan denied in part the motion to dismiss the class action complaint filed on behalf of persons and entities that purchased or acquired TaskUs, Inc. (NASDAQ: TASK) securities between June 11, 2021 and January 19, 2022, paving the way for litigation to proceed. TaskUs provides outsourcing services for companies worldwide.
According to the amended complaint, defendants misstated two key human capital metrics, TaskUs’s employee attrition rate and its rating on Glassdoor, which misled investors. In his ruling, Judge Cronan said the plaintiffs have adequately pleaded that TaskUs misled investors to believe its Glassdoor ratings “accurately reflected the company’s positive workplace culture.” The complaint alleges that the ratings were the result of a policy at TaskUs requiring brand new employees to submit a review while still in training and “were still excited about [TaskUs] based on management’s promises that it was a ‘fun place to work,’ and had not yet experienced the disappointing reality of working at TaskUs.” The judge said that while an individual, “after embarking on a substantial effort,” could figure out that new employees did all the ratings, that does not mean that such information or data was “feasibly digestible.”
Judge Cronan also gave investors leave to amend the other pleading deficiencies he noted.
Next Steps: If you purchased share of TaskUs, Inc. (TASK) prior to June 11, 2021, you may have recourse against the Company’s actions.
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