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Lessons business and startup lawyers glean from Tinder lawsuit

July 18, 2014

In the wake of the media uproar around the IAC/InterActiveCorp internal office drama, comments about technology startups have ranged from outrage to snarky, I-told-you-so remarks, labeling the tech industry as “worse than a frat house” and claiming that “things having changed.” It can certainly seem that way when readers find out that a cofounder of the popular dating app Tinder sexually harassed a female executive and getting slammed with a lawsuit. But business and startup lawyers in Nevada or anywhere in the technology industry can learn a few things from the lawsuit, says Caroline Fairchild in Fortune Magazine online: lessons that are important to keep in mind when dealing with startups and conceptualization of techies and their businesses.

In the California lawsuit the plaintiff is Whitney Wolfe, another reported co-founder and “the face of West Hollywood, California-based Tinder’s marketing efforts to young women.” But, according to the lawsuit, Tinder’s chief marketing officer Justin Mateen “engaged in threatening and abusive behavior” toward Wolfe, including calling her a “whore” in front of Tinder’s CEO and his telling her he was taking away her co-founder title because “having a young woman with that title ‘devalues’ the company.” In neighboring Nevada, and across the U.S., business and startup lawyers like Scott Knight are mulling over the claim that the lawsuit makes stating that Tinder’s senior executives represented “the worst of misogynistic, alpha-male stereotype too often associated with technology startups.”

Fairchild writes that technology startups are often criticized for their lack of women in top positions, with Facebook being a notable one. And if business and startup lawyers in Nevada or anywhere else were to read the full legal complaint filed by Wolfe and not just the juicy headlines, it’s likely they’ll learn a few things, says Fairchild.

The first being that Tinder execs “used Wolfe’s gender when it suited them,” and no more. The press releases and news media coverage of the new app when it was first unveiled put Wolfe at the front and center, highlighting “How Tinder Solved Online Dating for Women.” When Wolfe protested that she hadn’t been included in more general business coverage, they dropped her like she was hot, and her name is nowhere to be seen among subsequent headlines.  And if Knight or other business and startup lawyers in Nevada see Las Vegas as a boy’s club, they’ll be interested to know that when Wolfe met with other senior executives, they dismissed her complaints and “allegedly told her ‘I can still sleep at night.’”

But it’s not just a gender-based problem. Part of the issue Tinder is facing now has to do with the reality that “it is clear that tech startups often suffer from a poorly managed office culture that more times than not hangs a few people out to dry down the road to success,” Fairchild points out. She reminds us again of the internal politics that pushed Facebook’s co-founder Eduardo Saverin out of his place in the startup. It’s not a bad idea for tech startups to retain lawyers like general counsels according to some recent industry business models, and the Tinder lawsuit is just another example of the legal problems startups encounter.

 

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