Photo of Keith Rabois by Max Whittaker, 2010, TechCrunch Disrupt/Flickr. CC-by-SA 2.0.
Late Thursday, All Things D reported the news of the sudden and unexplained departure of hi-tech payments company Square's chief operating officer Keith Rabois. As it turns out, Rabois left the company amid a sexual harrassment claim filed against Rabois by another Square employee, The Wall Street Journal reported Friday. Square has attorneys looking into the allegations, and Rabois "said he resigned in order to not cause a distraction for the company," The Journal reported.
"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."
Rabois wrote on his Tumblr that he was already working on a new venture which he hoped to announce in February. Square, which was founded by Twitter co-founder Jack Dorsey, reported handling $10 billion worth of electronic payment transactions in 2012, via its Square reader device, a white box that plugs into smartphones and tablets, as well as a Square app. The company also recently announced a wide-ranging partnership with Starbucks.