Keith Rabois’s Long Statement on Personal Relationship With Square Employee, Sexual Harassment Claim That “Feels Like a Shakedown”
I am meeting with former COO Keith Rabois right now about the developing situation at Square, which involves a sexual harassment claim from a male employee still at the payments company.
The issue was first reported in The Wall Street Journal, just as Rabois posted his own account on the situation.
I’ll have more in a bit, but here is a pretty stunning statement he just gave me that also just published on his Tumblr blog, describing a personal relationship with an employee that went badly awry.
Rabois resigned yesterday as COO of the high-profile and heavily funded San Francisco startup:
The past few days have been the toughest, saddest, most frightening, and emotionally draining of my life. They have deeply affected me, both personally and professionally.
In May 2010, I met someone via mutual friends. With increasing frequency, we hung out, drank wine, and I helped prepare him for interviews with tech startups. As our friendship deepened, we spent more time together, and our relationship became physical. We regularly worked out at the gym, occasionally hung out at my home, and exchanged intimate, personal information, as people in similar relationships often do.
Several months after our relationship began, I recommended that he interview at Square. He went through the interview process and was ultimately hired. I did not interview him. I had no impact on his potential success at the company. At no point did he ever report directly to me, and I have seen his work product less than a handful of times.
Last week, a New York-based attorney threatened Square and myself with a lawsuit. I am told this lawsuit would allege that the relationship was not consensual, and would go on to accuse me of some pretty horrible things. I was told that only a payment of millions of dollars will make this go away, and that my career, my reputation, and my livelihood will be threatened if Square and I don’t pay up.
I realize that continuing any physical relationship after he began working at Square was poor judgment on my part. But let me be unequivocal with the facts: (1) The relationship was welcome. (2) Square did not know of the relationship before a lawsuit was threatened; it came as a complete surprise to the company. (3) He never received nor was denied any reward or benefits based on our relationship. And (4), I did not do the horrendous things I am told I may be accused of. While I have certainly made mistakes, this threat feels like a shakedown, and I will defend myself to the full extent of the law.
I decided to resign from Square so my colleagues could continue to do great work without the distraction that a lawsuit would most certainly bring. I deeply regret that I let my personal and professional lives to become intertwined, and I apologize to my colleagues and friends (at Square and elsewhere) who I’ve let down, and who will bear the brunt of some of the unnecessary, negative attention this situation will likely bring.
I am already working on something new and hope to announce that in February.
Here is a statement from Square about the developing situation:
“The first we heard of any of these allegations was when we received the threat of a lawsuit two weeks ago. We took these allegations very seriously and we immediately launched a full investigation to ascertain the facts. While we have not found evidence to support any claims, Keith exercised poor judgment that ultimately undermined his ability to remain an effective leader at Square. We accepted his resignation.”