Square, the online-payments startup, is paying the legal expenses of Keith Rabois, the well-known Internet executive who resigned as its chief operating officer last Thursday after an employee claimed Rabois had harassed him.
Rabois denied the accusations and said an offer by the employee's lawyer to settle the matter for millions of dollars "felt like a shakedown." Ricardo Reyes, a company spokesperson, said Square had investigated the matter and "found no evidence to support any claims."
Richard Curiale of Curiale Wilson is representing both Square and Rabois in the matter, AllThingsD's Kara Swisher reported in an interview with Rabois on Friday, and Rabois has not hired separate counsel.
Rabois said in a blog post that the potential lawsuit had created a "distraction" for the company. In a statement, Reyes said that Square had found that Rabois had " exercised poor judgment that ultimately undermined his ability to remain an effective leader at Square."
The employee, whose identity has not yet been made public, is represented by Steven Berger of Berger & Webb in New York. Berger has not responded to multiple requests for comment on the matter.
It is standard for companies to indemnify employees (e.g., pay their legal expenses) except in cases of clear wrongdoing.
So, at least for now, Square is putting its money where its mouth is in defending Rabois.
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