Groupon Hit With New Lawsuit 
 
 September can’t end soon enough for Groupon. The month brought a string of staff departures, SEC spats and the indefinite shelving of the company’s long-awaited IPO. Now a second class of employees has filed a class action against Groupon over unpaid overtime. 
 
 In a Chicago federal court filing last week, a woman representing so-called “deal vetters” at Groupon claimed the company broke federal and state law by failing to pay overtime to those who worked over 40 hours a week. According to the plaintiffs’ lawyer, Doug Werman, deal vetters were responsible for reviewing the terms of the transactions between Groupon and the merchants with which it partners. The position has since been eliminated. 
 
 SEE ALSO: Groupon's Funky Friday: New COO Goes Back To Google; Numbers Revised 
 
 The deal vetters’ proposed class action echoes a similar one filed in late August by Groupon salespeople. The salespeople in that suit recently amended their complaint to provide additional facts such as a sample work contract that reveals a starting salary of $32,000. 
 
 Groupon did not return requests for comment. 
 
 Werman said about 50 deal vetters are affected by the new lawsuit, while over 1,000 salespeople are covered by the earlier filing. In court proceedings today, a judge said that the parties could begin discovery, a procedure that will allow both sides to collect evidence to argue whether or not the class action should go forward. ||||| Groupon was hit with its second lawsuit in as many months from employees who said they were screwed out of their overtime. This comes shortly after the online discounter lost its COO, its sales chief, its IPO date, and its favorite bullshit accounting metric. It's almost as though Groupon is some sort of hive of misery and deceit! 
 
 The latest blow comes from a federal class action suit just filed in Chicago, covering 50 "deal vetters," employees responsible for reviewing Groupon's contract with merchants. The vetters, said PaidContent, allege they did not get overtime for working more than 40 hours per week. In addition, more than 1,000 of Groupon's salespeople are covered by an August class action also seeking overtime pay. 
 
 This is what happens when your top people take out a ludicrous $810 million in bonuses before the IPO: Everyone else in the operation starts looking real, real carefully at their own compensation. And, no, they won't give you a discount. ||||| Groupon Inc., the top online-coupon provider, filed to raise $750 million in an initial public offering, riding a wave of Web-company share sales and giving investors a chance to bet on the surging daily-deal market. 
 
 The IPO will be handled by Morgan Stanley (MS), Goldman Sachs Group Inc. (GS) and Credit Suisse Group AG (CSGN), according to the filing. Chicago-based Groupon, founded in 2008, will trade under the ticker GRPN. 
 
 Groupon has drawn increasing interest from Wall Street since December, when it opted to weigh an IPO instead of accepting a $6 billion takeover bid from Google Inc. As early as March, Groupon was in talks with bankers about an IPO that would value the company at as much as $25 billion, people familiar with the matter said at the time. Groupon is benefiting from demand for daily coupons, which provide discounts at local businesses like restaurants and nail salons. 
 
 “You need to have a war chest,” said Sandeep Aggarwal, an analyst with Caris & Co. in San Francisco. “You need to have that access to capital to maintain that level of growth.” 
 
 Groupon had an implied valuation of $5.6 billion at the end of March, according to research firm Nyppex LLC. 
 
 Groupon Chief Executive Officer Andrew Mason said in a memo to employees that going public would make it “easier to make big acquisitions” and that all full-time employees will get equity in the share sale. He also said employees should avoid any “forward-looking statements” about Groupon in the months before the filing, dubbing the IPO “Groubrangelina,” a riff on the nickname given to celebrity couple Brad Pitt and Angelina Jolie. 
 
 Copycats Abound 
 
 The company enjoys the benefit of pioneering the market for daily deals, which according to researcher BIA/Kelsey in Chantilly, Virginia, is set to generate $3.9 billion in sales in 2015, up from $873 million in 2010. 
 
 Groupon follows LinkedIn Corp., the No. 1 professional- networking site, which became the first major U.S. social-media company to sell shares to the public last month. Shares of the Mountain View, California-based company has surged 75 percent since its May 18 debut and is now valued at $7.5 billion. 
 
 Mason faces challenges in the market for daily coupons from hundreds of rivals, including LivingSocial.com, as well as recent entrants Google Inc. (GOOG), Facebook Inc. and Yelp Inc. 
 
 Groupon’s sales surged to $644.7 million in the first quarter, a 14-fold increase from $44.2 million a year earlier. 
 
 ‘Scary’ Marketing Costs 
 
 The company recorded a $113.9 million net loss in the period, because of a $208 million marketing expense and $178.9 million in selling, general and administrative costs. 
 
 “What was scary to me was the extent of that marketing expense,” said A.B. Mendez, a research analyst at GreenCrest Capital Management LLC in New York. “It’s not yet clear what their longer-term margins will be or when they will be able to get to consistent profitability.” 
 
 Subscribers increased to 83.1 million in the first quarter from 3.4 million a year earlier, and the number of deals sold jumped to 28.1 million from 1.8 million. 
 
 Groupon has deals in more than 500 markets worldwide, compared with 260 for Washington-based LivingSocial. The companies offer daily discounts of as much as 90 percent and keep about half the revenue, giving the rest to merchants. Groupon announced a partnership yesterday with Expedia Inc. (EXPE), offering U.S. and Canadian customers discounts of about 50 percent on stays at more than 135,000 hotels. 
 
 “One of the biggest criticisms of Groupon is their desktop component is easy to copy, and that’s true,” Mendez said. “They’re going to have to continue spending a lot of marketing, and they’re going to need to invest in technology.” 
 
 ‘Bunch of Money’ 
 
 Still, the company has managed to distinguish itself from rivals and it is likely to keep increasing revenue in the coming years, said Greg Sterling, an analyst at Opus Research Inc. in San Francisco. Groupon said in the filing that it featured offers from more than 56,000 businesses in the first quarter. 
 
 The potential market is “several million,” Sterling said. 
 
 “It’s a very dramatic story,” he said. “Unless they screw it up, they should be able to keep it going for some time until the business starts to mature. The early investors are going to make a bunch of money.” 
 
 The biggest shareholder is Green Media LLC, which is owned by co-founder Eric Lefkofsky and his wife, Elizabeth Kramer Lefkofsky. Green Media owns 21.6 percent of Class A shares and 41.7 percent of Class B stock. 
 
 Investors Poised to Gain 
 
 Rugger Ventures LLC, owned by the family of Groupon co- founder Bradley Keywell, hold 6.9 percent of Class A stock and 16.7 percent of Class B. New Enterprise Associates and Accel Partners own 14.7 percent and 5.6 percent of Class A shares, respectively. 
 
 Investors with less than 5 percent ownership include T. Rowe Price Group Inc., Andreessen Horowitz, Greylock Partners, Russia’s Digital Sky Technologies and Kleiner Perkins Caufield & Byers. Bloomberg LP, the parent company of Bloomberg News, is an investor in Andreessen Horowitz. 
 
 Groupon was valued at about $1.3 billion in April 2010, when it raised $135 million from Digital Sky and other investors. An investment of $950 million, completed in January, pegged Groupon’s worth at $4.75 billion. 
 
 To contact the reporter on this story: Ari Levy in San Francisco at alevy5@bloomberg.net 
 
 To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
– Groupon employees have filed a class action lawsuit against the company claiming unpaid overtime, the second such suit filed against the daily deals website in the past month. This time around, Groupon’s so-called “deal vetters”—a position that no longer exists—say they weren’t paid overtime when working more than 40 hours per week. The first class action, filed late last month, came from salespeople, Paid Content reports. About 1,000 employees were covered by that filing, while about 50 are affected by this most recent one. It hasn’t been a good month for Groupon: It saw a string of departing staff including, Gawker notes, its COO and sales chief; the planned IPO was shelved indefinitely; and the company has sparred with the SEC.