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Uber Investor Sues to Kick Kalanick Off Board

Sarah Thomas

Benchmark Capital has filed a lawsuit to remove ousted Uber CEO Travis Kalanick from the company's Board of Advisors, alleging fraud, breach of contract and breach of fiduciary duty in a suit filed in Delaware on Thursday.

The lawsuit, uncovered by Axios, says that Kalanick is aiming to fill Uber's board with "loyal allies in an effort to insulate his prior conduct from scrutiny and clear the path for his eventual return as CEO -- all to the detriment of Uber's stockholders, employees, driver-partners, and customers." (See Kalanick Steps Down as Uber CEO.)

In June 2016, Uber elected to expand its board from eight members to 11, giving Kalanick the sole right to fill the extra three seats. One seat is reserved for Uber's CEO, a currently vacant position, and Kalanick himself took another seat. Benchmark, an early Uber investor that owns around 13% of the company compared to Kalanick's 10%, says it never would've given him that power if it knew of the "gross mismanagement and other misconduct" that has come to light at Uber over the past few months. (See Uber Hopes Holder Reform Will Stop Implosion .)

When he resigned, Kalanick promised to fill the open spots after an independent review process and unanimous board approval, but Benchmark alleges he now won't codify those changes with an amended voting agreement. So after successfully campaigning to oust Kalanick as CEO, the firm wants him off the Board entirely and to have him immediately removed from the CEO search process. This would curtail his reported ambitions of "Steve Jobs-ing" his way back into the company as CEO again after a brief leave. (See Uber Does Housekeeping Amongst CEO Strategizing.)

Kalanick calls the claims "without merit and riddled with lies and false allegations" and says he will "continue to act in the interests of Uber and all of its stakeholders and is confident that these entirely baseless claims will be rejected."

Uber's first employee and original CEO Ryan Graves also stepped down from his current role of vice president of operations on Thursday, but will continue to serve on Uber's board.

Join Women in Comms for its upcoming networking breakfast in Denver, Colorado, on September 28, where we'll be tackling the question "What's the matter with the tech industry?"

This lawsuit is the latest in a string of troubles for Uber, kicked off by a February blog post written by former Uber engineer Susan Fowler alleging discrimination, sexism and ineptitude within the ride-hailing company. It's led to a steady stream of more wrongdoing being uncovered at Uber that goes far beyond sexism in its scope, touching on everything from how Kalanick ran his business to stolen trade secrets to misconduct in a rape proceeding to defective cars and more. (See Uber's HR Nightmare: Company Investigates Sexual Harassment Claims.)

The Uber scandals have also kickstarted a discussion on conditions in the tech industry for women. Google (Nasdaq: GOOG) is grappling with its own issues as well this week after it fired an engineer that wrote a ten-page memo bemoaning the company's treatment of dissenting, conservative viewpoints, calling for rethinking of its diversity programs and suggesting biological and psychological differences account for the lack of women in engineering. Google was set to host a company-wide town hall today to discuss the controversy, but canceled it as employees expressed concerns about online harassment after their questions for the town hall were leaked to the public. (See Google Fires Engineer Over Gender Manifesto.)

— Sarah Thomas, Circle me on Google+ Follow me on TwitterVisit my LinkedIn profile, Director, Women in Comms

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Sarah Thomas
Sarah Thomas,
User Rank: Blogger
8/11/2017 | 4:26:00 PM
CEO search
It sounds like Kalanick is the main reason Uber can't secure a new CEO. No one wants to deal with him and he's trying to pull the strings on that appointment. If Benchmark wins the suit and he's out of the CEO search process and off the board, I bet they'll get a new CEO signed up ASAP. And, she or he will have a huge task in front of her/him to turn Uber around.
User Rank: Lightning
8/12/2017 | 12:59:59 PM
Re: CEO search
turn around? is biz model having problem or revenue going down? Travis is not polished as a politician; he is edgy and relentless. hey, that is entrepneurship needed to drive a startup to success in silicon valley.
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