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A Seattle modeling company filed a federal lawsuit against Microsoft last week, claiming that it “incurred hundreds of thousands of dollars in expenses that were never reimbursed” for work promoting the HoloLens mixed reality headset.

The lawsuit, first spotted by The Seattle Times, also names a Microsoft employee, Jonathan Plumb, and alleges that he pursued sexually the founder of the modeling agency and was “making hypersexualized comments about other females involved” in the project. When his advances were not reciprocated, he allegedly retaliated through his authority at Microsoft, and the modeling agency was later terminated without ever receiving full payment for its work.

Jennifer Kelly, and her firm Genesis Industries, are asking the court for economic and non-economic damages “past and future” of an unspecified amount.

Microsoft issued the following statement in response to the suit: “We are reviewing the complaint. Microsoft is committed to a diverse workforce and an inclusive culture where everyone has the chance to succeed.”

CoroWare, a Bellevue-based Microsoft supplier involved in the project did not return a request for comment.

Plumb first approached Kelly in early 2015 about getting some “brand ambassadors” for HoloLens promotional events. In June 2015, Genesis and CoroWare came to an agreement that the vendor would handle invoices, expenses and wages for Genesis. The lawsuit claims that CoroWare “served no function other than being a place holder.”

Over time, Microsoft gave Genesis more work, using its “brand ambassadors” at trade shows around the U.S. and Canada. But the lawsuit alleges that CoroWare claimed it was unable to immediately fund Genesis’ travel and accommodations and later defaulted on invoices. Microsoft reassured the agency that it would reimburse all expenses, so Genesis fronted the money itself.

Genesis said in the lawsuit that Microsoft authorized the agency to hire at least 12 more employees while CoroWare continued to default on invoices. Genesis said it didn’t book any jobs for 2016, as requested by Microsoft.

Toward the end of 2015, the lawsuit claims, Plumb began pursuing Kelly and acting inappropriately toward other women at Genesis. Kelly saw a social media post on Dec. 7, 2015, of Plumb drinking with an underage Genesis employee, and around the same time, the lawsuit alleges Plumb was “clearly intoxicated” while making inappropriate comments about female Genesis employees to Kelly.

Kelly confronted Plumb about his actions, and the lawsuit alleges Plumb responded by sharply limiting Genesis’ scope of work and pulling the agency’s authorization to access Microsoft’s Redmond campus. On Dec. 28, 2015, Microsoft sent Genesis a termination letter, effective Dec. 31, which allegedly went against an agreement requiring 30 days written notice of termination.

Early in 2016, Kelly reached out to Plumb after learning that CoroWare was poaching Genesis employees, in violation of the agreement between Microsoft and Genesis. The lawsuit claims that this is still happening today, and Genesis still hasn’t been paid in full for the HoloLens work it did in 2015.

“Upon information and belief, the Microsoft HoloLens project demos are still continuing today. Further, Microsoft is still using former GI employees via third party vendors that were improperly poached from GI in violation of the Agreement,” according to the suit. “To date, GI has not received all payment owed for its services on any of Microsoft’s projects, nor has GI been reimbursed for the costs it incurred at the express direction of Microsoft — despite Microsoft’s repeated assurances of payment.”

Here is Genesis Industries’ full complaint:

Kelly v. Microsoft by Nat Levy on Scribd

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