Ripped from the Headlines: People Problems Plague Startups

People challenges are the single largest stressor for startups, according to one Stanford University professor – and although 2017 is far from over, a number of headlines bear this out.

In May, a former employee sued UploadVR, a Silicon Valley startup, with claims of egregious sexual harassment. UploadVR is a promotions company for virtual, augmented and mixed reality projects. The lawsuit alleged the company’s founders and employees created a hostile work environment that fostered sexual harassment, gender discrimination and retaliation:

  • Male employees were said to discuss sexual exploits in graphic detail;
  • The founders and other employees were accused of speaking “sexually” about female employees to their faces;
  • Upload VR allegedly had a “kink room” in the office to encourage sexual activity on premises.

In June, JetSmarter, a subscription service for private jets, was sued by former employees who said the company failed to pay thousands of hours of overtime. The lead plaintiff in the federal class action lawsuit claimed the company violated the Fair Labor Standards Act and said she alone was owed nearly $40,000.

And in July, BetterworksSystems Inc., another Silicon Valley startup, was sued by a former employee who alleged sexual harassment, a hostile work environment and physical assault. During a company retreat, the plaintiff said, the CEO was intoxicated and inappropriately touched female employees. The complaint said the company’s culture had “more in common with a boy’s club or fraternity house than a professional work environment.”

These cases are outrageous, to be sure – that’s why they made national headlines. But they are also powerful examples of how quickly people issues can get out of control without smart policy and proactive attention. What may seem like a “work hard, play hard” atmosphere can become a bastion of bad behavior and liability.

The HR Help Desk exists to help entrepreneurs set up for success – and to protect their businesses and reputations. If you have people, you need people policy – call us today at 855.474.2836 or email us at Don’t be the next headline.