After a season of turmoil and infighting, Outfest was sued by a former executive director for defamation, harassment, and discrimination.
In a lawsuit filed Friday in Los Angeles Superior Court, Damian Navarro accuses Outfest’s board of directors, some of whom he accuses of being responsible for the organization’s bankruptcy. It claims that despite repeated warnings about its dire financial situation, the board refused to take action. He alleges that some board members campaigned to discredit him and remove him as head of the festival in retaliation for raising concerns about discrimination.
“As the first person of color to lead Outfest, I expected a sense of belonging and shared values,” Navarro says. “Instead, I encountered systemic racism, self-dealing, and retaliation that undermined not only my leadership, but the organization’s very mission.”
In a statement, Outfest denied the “baseless and malicious claims.” It added: “Unfortunately, during Mr. Navarro’s leadership, the Outfest Board of Directors determined that it was in the organization’s best interest to bring in a new executive director.” We remain committed to this decision as the best course of action for our organization and look forward to resolving this matter through the legal process. ”
Outfest, Los Angeles’ long-running LGTBQ film festival once considered a powerhouse in the independent film world, laid off nearly its entire staff last year after some members announced plans to unionize. , collapsed. Amid the economic turmoil, the Legacy Awards, a marquee gala that typically honors Hollywood’s biggest talent, has been postponed. This coincides with Mr. Navarro’s leave of absence after his contract was not renewed last year, and Mr. Navarro told The Hollywood Reporter that concerns about discrimination and harassment raised by Mr. Navarro would be “completely and impartially investigated.” He said the purpose was to make it possible. Imposed by multiple board members.
In an October email to donors, Outfest directors called the situation “dire” and hinted at mismanagement.
“Recently, the board of directors was forced to take over the day-to-day operations of the organization, and large amounts of undisclosed debt that had been hidden from the board of directors were discovered,” the message said, before adding, “Outfest is in deep financial crisis. We are in dire straits and need to raise $750,000 as soon as possible.”
In the lawsuit, Navarro claims the email defamed him by alleging that the board had hidden, undisclosed debts that made him an “industry pariah.” He said Outfest’s bleak financial situation began long before he became managing director in 2019, and that he had repeatedly implored the board to address these issues, but in the end, “[his company’s]He claims he has been used as a scapegoat for wrongdoing.
According to the complaint, Mr. Navarro inherited an organization that was more than $250,000 in debt and had seen years of declining membership and ticket sales, but was overwhelmed by the COVID-19 pandemic and California’s new labor law. The situation was made worse by several unforeseen factors, including increased expenses due to the pandemic and soaring venue costs. Navarro claims he eliminated debt and significantly increased revenue within his first 18 months as head of Outfest. Still, the organization faced an impending budget deficit (expected to reach $300,000 by March 2023) and cash flow problems that required staff layoffs, according to the complaint.
But the board chose to take “no action despite increasingly dire financial reporting,” Navarro claims. He points out that leadership refused to cut staff during the writers’ and actors’ strike to “avoid bad publicity.” At a March 2023 meeting, Navarro emphasized tight finances with enough reserves to cover salaries through May, but was ignored, the lawsuit alleges. “In order for Outfest to meet its financial obligations, Outfest must carefully manage its spending,” he wrote in a letter to the board the following month, according to the complaint.
“Although Mr. Navarro kept board members updated on the organization’s financial condition at every step, the board took no action to increase receipts or reduce expenses.” wrote attorney Rob Henning in the filing.
Board members’ obligations to the organization include fundraising or donating at least $10,000 annually to Outfest. Mr. Navarro claimed that the majority of the board “consistently failed” to meet this standard, and board member Alexis Fish allegedly refused to raise any capital at all. Over the past two years, only 30% of the board met the minimum requirements, resulting in a budget shortfall of approximately $500,000, the lawsuit alleges.
The complaint also details a series of conflicts between Mr. Navarro and several board members over allegations of harassment and discrimination. In 2022, he raised a number of concerns about Outfest’s alleged discriminatory practices affecting Latinos, including himself. As a result, the lawsuit alleges, board members named in the complaint, including Fisch and Valerie Stadler, began a “retaliatory campaign” aimed at undermining his leadership. . Allegations include inciting staff by spreading false rumors about Navarro’s impending termination, removing him from the board of directors, and launching a frivolous investigation into allegations of inappropriate conduct. can be mentioned. This included an investigation into allegations that her husband, who was not attending Outfest, flirted with an actor at the event, as well as allegations that Ms. Navarro discriminated against women and Black staff members. Navarro claims that an independent investigation into the incident by Fromholtz found no negligence.
“The investigation against me was initiated in response to allegations of an unfounded and retaliatory nature,” Navarro said. “The company found no evidence of discriminatory treatment by me.”
The complaint highlights that the board failed to investigate Navarro’s discrimination and harassment claims.
The complaint also details allegations of self-dealing by board members. Navarro said Fish was directly involved and financially responsible for Outfest, including a documentary about Susan Feniger, even though she was allegedly employed as the chef’s business development director. He said he made numerous attempts to secure screenings for the films he was involved with. In 2022, Stadler approached him about screening a film she was executive producing on the opening night of Outfest. In response to this offer, Mr. Navarro expressed concerns about a conflict of interest.
In August 2023, the board voted not to renew Navarro’s contract as executive director “as a clear and unlawful act of discrimination and retaliation,” according to the complaint. He took leave in September, four months before his contract expired.
Currently, the organization’s only employee is Executive Director Christopher Laxter.
In December, the Los Angeles Times reported that Outfest’s collapse was largely due to Mr. Navarro’s mismanagement. Navarro responded to claims by anonymous sources that he arranged for the organization to pay for actor John Waters’ star appearance on the Hollywood Walk of Fame without board approval, saying, “Unauthorized transactions are “There has never been one,” he said, adding that the agreement had been reached. It is done transparently and based on the knowledge of the board. ”
He also denied allegations that he kept board members in the dark about the use of a $700,000 inheritance gift that Outfest received. “All expenditure related to the grant was properly documented and reported, and the board was regularly updated on how the funds were being used,” he added. “Any allegations of abuse or lack of transparency are untrue. All financial decisions were made with the full oversight of the Finance Committee and in line with Outfest’s mission and goals.”
