Inside WeWork’s $2M+ settlement over claims of drug use, sexual harassment

Former employee’s complaint detailed drug use and problematic sexual relations on real estate team

Feb.February 24, 2020 09:35 AM
The document threatened a lawsuit against WeWork at a time when it was still in the midst of rapid growth and fundraising (Credit: Getty Images)

The document threatened a lawsuit against WeWork when it was in the midst of rapid growth and fundraising (Credit: Getty Images)

A woman who formerly worked in WeWork’s real estate business sent a 50-page document to the beleaguered company in the spring of 2018 filled with explosive allegations of drug use, sexual harassment and pay discrimination.

The document threatened a lawsuit against WeWork when it was in the midst of rapid growth and fundraising, according to Business Insider, which obtained a copy of it.

WeWork then conducted an investigation that found credible evidence of drug use and sexual relations between co-workers, and the firm ultimately settled the woman’s claim for more than $2 million in cash, the publication reported.

Mark Lapidus

Mark Lapidus

The timing of the letter coincided with an effort to push out Mark Lapidus, one of the earliest employees at the firm and the cousin of WeWork co-founder Adam Neumann’s wife. (Lapidus and Neumann ultimately worked out an exit package that would let him keep his vested stock.)

Although the letter did not name Lapidus directly, it claimed that there were several problematic sexual relations within his division and others, and that there was widespread cocaine, Molly and Xanax use on the real estate team, which he ran until 2018. Lapidus declined to comment to The Real Deal regarding the claims.

Business Insider withheld the name of the woman who made the claims because she said she was a victim of sexual assault, something the publication was unable to confirm.

WeWork quickly went from high flying to struggling, after an attempt to go public revealed massive losses, questionable loans to executives and other red flags. After the IPO effort was abandoned, the company’s biggest backer, SoftBank, took over and has moved to turn the business around. The company recently named industry veteran Sandeep Mathrani as its new CEO. He sent Business Insider a statement saying that WeWork’s “new executive leadership has zero tolerance for such behavior.”

“It is our highest priority to ensure our employees feel safe and respected, and this starts at the top,” he said. “In this new chapter at WeWork we are fully invested in upholding a culture of integrity.” [Business Insider] – Eddie Small

Related Articles

Wendy Silverstein (Credit: Getty Images)

Wendy Silverstein, co-head of WeWork’s real-estate fund, is out

WeWork CEO Adam Neumann (Credit: Getty Images and iStock)

WeWork’s side businesses are fizzling

Sarah Pontius (Credit: Union College)

Another head rolls at WeWork

WeWork's Marcelo Claure and Sandeep Mathrani (Credit: Getty Images)

WeWork to miss 2020 targets because of coronavirus

Charles Kushner and 331 East 9th Street (Credit: Kusner Photo by Ilir Bajraktari/Patrick McMullan via Getty Images; Google Maps)

Judge grants Kushner tenants free rent at East Village complex

WeWork CEO Sandeep Mathrani (Credit: background by Jeenah Moon/Getty Images)

WeWork offers staff $100-a-day bonuses to keep showing up

Softbank CEO Masayoshi Son (Credit: Getty Images, iStock)

WeWork gears up for potential legal fight with SoftBank

Former WeWork CEO Adam Neumann and Maximus' Robert Rosania (Credit: Kevin Hagen/Getty Images; Ambrosetti)

WeWork sues NY firm over botched development deal