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Mailchimp, one of the podcast industry’s best-known sponsors, recently reached out to Pineapple Street Studios about making a new show. Pineapple and Mailchimp first collaborated in 2019, producing narrative ads for Mailchimp and branded series. So given their longstanding relationship, Pineapple Street staff were shocked when management at their parent company, the radio giant Audacy, informed them at a meeting on October 3rd that the new Mailchimp contract required all work on the series to be performed by non-union workers.

Many of the producers who worked on Mailchimp projects in the past, or would take on a new branded series, were in the union. According to staffers present at the meeting, management gave them an ultimatum: sign a side agreement allowing the company to hire non-union contractors, or Mailchimp walks not only from the new series, but from the ads and existing show as well. Two days later at a follow-up meeting, Audacy reiterated that without the agreement, it would lose Mailchimp as a client. But creating a path around the union would defeat the point of organizing in the first place. The union refused to sign, and Mailchimp pulled its business.

Audacy declined to comment on the meeting or contract negotiations. When Hot Pod reached out to Mailchimp, company spokesperson Christina Scavone said there were a variety of factors contributing to the cancellation. She did not deny that the disagreement over union labor was one of them.

“We’ve worked with Pineapple Street Media over the past few years and always valued its contributions; however, for various business and creative reasons, we decided not to move forward with this show,” Scavone said in a statement. “Intuit Mailchimp has and continues to proudly work with unions across different areas of our business, and we are constantly evaluating opportunities to produce great content.”

It’s a surprising turn of events considering Mailchimp and Pineapple Street’s history. But loyalty aside, Mailchimp, Pineapple Street, and the whole industry have changed. Both companies so associated with the podcast boom were snatched up by larger corporations when times were good — Pineapple Street by Audacy in 2019 and Mailchimp by financial software company Intuit in 2021. The audio industry, once flush with money, started contracting in 2022, leaving Audacy in a precarious financial position. Following the lead of workers at studios like Gimlet and iHeartMedia Podcasts, Pineapple Street staff unionized with the Writers Guild of America, East last fall, claiming pay cuts and inadequate wages under Audacy’s management. (Disclosure: The Verge’s editorial staff is also unionized with the Writers Guild of America, East.)

In a letter sent to Intuit and Mailchimp on Monday, the union claimed that the decision to cancel their partnership over the labor dispute appears to be “unethical and illegal.” “As we’re sure you’re aware, the National Labor Relations Act protects union activities and prevents employers from discriminating against employees or job applicants based on union status or sympathies,” the letter says.

However, Mailchimp is a client, not an employer. Scott Witlin, a partner at Barnes and Thornburg who focuses on labor law in the entertainment industry, says that Mailchimp is within their rights to make such a demand. “A company can terminate a contract with another company because that subcontractor’s employees have unionized, and it’s not a violation of the law,” Witlin said. 

As for the “why,” Scavone declined to comment on Mailchimp’s demand. But Witlin said that when companies take such a stance, it is because they do not want to get caught up in another company’s union fight. “People are afraid that there will be a strike or a lockout or some other disruption for the work and they don’t want to have that happen with their products,” he said.

In the year since forming the union, Pineapple Street staffers have yet to stage any kind of work stoppage. Producer Emerald O’Brien, who worked on Going Through It, a Mailchimp branded show that wrapped its fourth season in July, said the union never came up as an issue prior to the meeting with management.

“At no point did Intuit Mailchimp express any issues with that,” O’Brien said. “I have no idea what they think is going to happen using union labor.”

With Mailchimp out of the picture, the argument between Audacy and Pineapple Street’s union is not done. Workers present at the October meeting with management say that Audacy attorney Ron Allen told staffers that if the union did not agree to the side agreement — which would have applied to any client that demanded non-union labor, not just Mailchimp — that “there will be downstream consequences, such as operational reductions.” Staffers understood this to mean layoffs.

On Thursday, the union filed a charge with the National Labor Relations Board on Thursday alleging that Audacy “negotiated in bad faith bargaining in negotiation sessions … by engaging in threatening tactics and surface bargaining.” Audacy declined to comment on the labor charge.

As for Mailchimp’s involvement in future podcasting projects, the company’s options may be limited as union shops become the norm. The industry contraction has resulted in more studios unionizing as workers seek greater protections against layoffs or, at least, a better severance package in the event layoffs happen anyway. Crooked Media unionized with the WGAE in February, as did Pushkin Industries last month.

“Mailchimp has been a great 21st-century patron of the arts,” said Pineapple Street producer Sophie Bridges. “It would be hugely disappointing for that to stop being the case.”