Last night, Square COO Keith Rabois unexpectedly resigned his position.
Kara Swisher, who broke the news, said it was over "disagreements" between Rabois and CEO Jack Dorsey.
Now, Rabois has written a blog post saying that he actually resigned due to accusations of sexual harassment made against him by a Square employee.
He denies the allegations.
He says he resigned "so my colleagues could continue to do great work without the distraction that a lawsuit would most certainly bring."
In its own statement, Square says: " While we have not found evidence to support any claims, Keith exercised poor judgment that ultimately undermined his ability to remain an effective leader at Square. We accepted his resignation."
Rusli reports that a lawyer for the Square employee, Steve Berger, came to management with the claims two weeks ago.
Square has since hired its own lawyer, Richard J. Curiale, who is now conducting an investigation.
Other than for his work at Square, Rabois is known as one of the Valley's top angel investors.
Square is a payments company based in the Bay Area. It makes a product that turns iPads and iPhones into cash registers. It was founded by Twitter cofounder Jack Dorsey.
Here is Rabois's blog post:
Yesterday I resigned from Square, and I want to take the opportunity to explain to you why.
The past few days have been the toughest, saddest, most frightening, and emotionally draining of my life. They have deeply affected me , both personally and professionally.
In May 2010, I met someone via mutual friends. With increasing frequency, we hung out, drank wine, and I helped prepare him for interviews with tech startups. As our friendship deepened, we spent more time together, and our relationship became physical. We regularly worked out at the gym, occasionally hung out at my home, and exchanged intimate, personal information, as people in similar relationships often do.
Several months after our relationship began, I recommended that he interview at Square. He went through the interview process and was ultimately hired. I had no impact on his potential success at the company. At no point did he ever report directly to me, and I have seen his work product less than a handful of times.
Last week, a New York-based attorney threatened Square and myself with a lawsuit. I am told this lawsuit would allege that the relationship was not consensual, and would go on to accuse me of some pretty horrible things. I was told that only a payment of millions of dollars will make this go away, and that my career, my reputation, and my livelihood will be threatened if Square and I don’t pay up.
I realize that continuing any physical relationship after he began working at Square was poor judgment on my part. But let me be unequivocal with the facts: (1) The relationship was welcome. (2) Square did not know of the relationship before a lawsuit was threatened; it came as a complete surprise to the company. (3) He never received nor was denied any reward or benefits based on our relationship. And (4), I did not do the horrendous things I am told I may be accused of. While I have certainly made mistakes, this threat feels like a shakedown, and I will defend myself to the full extent of the law.
I decided to resign from Square so my colleagues could continue to do great work without the distraction that a lawsuit would most certainly bring. I deeply regret that I let my personal and professional lives to become intertwined, and I apologize to my colleagues and friends (at Square and elsewhere) who I’ve let down, and who will bear the brunt of some of the unnecessary, negative attention this situation will likely bring.
I am already working on something new and hope to announce that in February.
Here is the full statement from Ricardo Reyes, Square spokesperson:
"The first we heard of any of these allegations was when we received the threat of a lawsuit two weeks ago. We took these allegations very seriously and we immediately launched a full investigation to ascertain the facts. While we have not found evidence to support any claims, Keith exercised poor judgment that ultimately undermined his ability to remain an effective leader at Square. We accepted his resignation.”
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