In 2020, popular figurine manufacturer Good Smile Company sued two former vice presidents, Guy Brand and James Young-sik Kim, for competing with its merchandise business while employed at GSC. In response, the former employees have filed a cross-complaint claiming that GSC actively profited from sexualising underage characters, discriminated against non-Japanese employees, evaded taxes, and funded 4Chan.
Good Smile Company is known for producing poseable figurines from anime and other popular media, most notably Nendoroids and Figmas. The company is headquartered in Tokyo, but has operations located in the United States.
As reported by Polygon, Good Smile Company’s initial suit accused Brand and Kim of taking advantage of the company’s relationship with Netflix, and actively creating competing merchandise with the Stranger Things IP. The suit was mostly concerned with competing interests and a breach of contract.
While employed at GSC, these executives had signed noncompetes, non-disclosure agreements, and an agreement to refer business opportunities to the figurine company. GSC claims that Brand and Kim had asked to be switched to independent contractor status while they were forming their own company.
In the cross-complaint filed this month, the former employees stated that the managing director repeatedly defended the sales of “lolicon” figurines (lolicon refers to erotic art of underage anime characters). After the employees had informed her that these sales would violate American obscenity laws, the suit alleges, she retaliated against them by stripping them of their authority. Their complaint also states that they were asked to terminate American employees and retain Japanese-born employees during the pandemic.
The cross-complaint also alleges that GSC had knowingly evaded sales taxes for years, and that they owed a significant amount of back taxes to the United States. According to Brand and Kim, GSC had acquired the famously right-wing and white supremacist website 4Chan, which was being managed by the GSC headquarters in Tokyo.
These former executives claim that their workplace concerns were ignored and they were eventually pressured to resign. This claim contradicts GSC’s claim that the former executives voluntarily chose to end their permanent employment.
Their case will eventually be heard in California state court.
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