WeWork Paid Former Employee $2M Settlement In Sexual Harassment Case
WeWork, amid its rapid expansion in 2018, paid more than $2M to a female employee in the real estate division who was threatening to blow the lid off claims of rampant sexual harassment, pay discrimination and widespread drug use within the company.
In a 50-page document obtained by Business Insider, the woman reportedly said she would sue the company and make a complaint to the Equal Employment Opportunity Commission.
The document outlines a litany of complaints, specifically the use of Xanax, Molly and cocaine and multiple cases ofsexual relations between superiors and employees. WeWork, then gearing up for its hyped initial public offering and negotiating billions in investments from SoftBank, ran an investigation that concluded accusations of drug use and sexual relationships between subordinates and their managers were credible.
The real estate division seemingly operated under a different set of rules than the rest of the company thanks to favoritism from Neumann, Business Insider reported, including lavish spending on parties and meals. Mark Lapidus was at the time the global head of real estate, and he was forced out around the time of the settlement.
The company settled with the woman, who wasn't named by Business Insider because she said she had been sexually assaulted, an assertion the publication could not verify.
Separately, WeWork was sued in 2018 by the company’s former director of culture, who said she was sexually assaulted at a company party. Last year, a former WeWork employee accused the company of pregnancy discrimination. Both lawsuits are ongoing.
WeWork is currently trying to reestablish itself after its damaging, unsuccessful attempt to go public last year. Its IPO prospectus revealed vast losses and no clear path to profitability, and subsequent reports of Neumann's management style, drug use, lavish spending and self-dealing scared off investors further.
The fallout involved Neumann's ouster as CEO, multiple cuts to WeWork's valuation and Japanese investment giant SoftBank, by far WeWork's largest investor, eventually agreeing to a takeover that pulled it back from the brink of insolvency. The company's valuation fell from $47B to roughly $8B.
"At WeWork, new executive leadership has zero tolerance for such behavior or any violation of our company policies," newly appointed CEO Sandeep Mathrani told Business Insider in a statement, adding that in the “new chapter” WeWork is “fully invested in upholding a culture of integrity."
