In House - The FindLaw Corporate Counsel Blog

Does Company Culture Matter? Ask Uber

A week before Uber's founder resigned under pressure from investors, a board member blurted out a sexist remark at a staff meeting.

David Bonderman was meeting with fellow board member Arianna Huffington and others on the same day a law firm released a report on sexual harassment and gender bias at the company. Huffington said that having one woman on the board often leads to another.

"Actually, what it shows is that it's much more likely to be more talking," Bonderman said.

A Toxic Culture?

Bonderman apologized after the incident became public, but it was too little, too late for him. It also marked the end of the road for Travis Kalanick, who took an immediate leave and then resigned as chief executive officer a week later.

Uber is now missing a CEO, COO, CFO, CMO and other high-level positions since company scandals started to take focus away from the company's success. Launched in 2009, it is valued at $70 billion today.

But the problems, which investors feared enough to demand Kalanick's resignation, started soon after he launched the company. According to reports, a toxic culture grew and eventually brought the company down.

Recode, reporting on the investigation by Covington & Burling, said Uber had a "frequently chaotic and hostile work environment without adequate systems in place to ensure that violations such as sexual harassment and retaliatory behavior were dealt with professionally."

Sexual Harassment

Susan Fowler, an Uber engineer, first pulled back the curtain on the hostile work environment there. She posted her "Very, Very Strange Year at Uber" on a blog that went viral.

Fowler described how a manager started to pressure her for sex soon after she arrived at the company. She reported him to human resources, only to be told that he "was a high performer" and that they "wouldn't feel comfortable punishing him."

She said the company culture became "comically absurd," leading her to find a new job. When she started, about 25 percent of the workers were women. When she left, only three percent remained.

"Women were transferring out of the organization, and those who couldn't transfer were quitting or preparing to quit," she said. "There were two major reasons for this: there was the organizational chaos, and there was also the sexism within the organization."

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