In a very surprising twist to Keith Rabois’ departure from Square yesterday, the reason is now known, and it wasn’t about business like everyone speculated. He was charged with sexual harassment by an employee.
Here’s Square’s statement, which highlights both that it has found no evidence for the claims, and that he used poor judgement:
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.
Rabois has written an emotional post about the situation on his personal Tumblr. Here’s an excerpt:
Last week, a Los Angeles DUI 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.
It is impossible for us to know all of the facts right now, and we’re not going to speculate due to its personal and legal nature.