When Your Company Tries to Cancel You
On December 26th, 2023, I sued Carta for wrongful discharge, retaliation, breach of contract, breach of implied covenant of good faith and fair dealing, defamation, implied defamation, false light, publication of private facts, and intentional infliction of emotional distress; in violation of Title VII of the Federal Civil Rights Act of 1964, the California Fair Employment and Housing Act, New York State and City Human Rights Law, as well as Delaware and Illinois law. This suit comes in response to my firing late in 2022, two months after I wrote to Carta’s Board of Directors about the serious, systemic problems I’d observed while working as the company’s Chief Technology Officer. My suit also named Carta’s CEO, Henry Ward, following the bizarre, widely-derided diatribe he published on his personal Medium account in October and then sent in a mass email to Carta customers. My claims became public last Friday, after first being served privately to allow Carta to request redactions of information it considers confidential.¹
Carta has been in the news quite a bit lately, following recent allegations that the company unethically misused confidential customer data to bolster its own trading revenue. Ward’s reaction to the scandal was all too familiar: first, attempting to downplay the concerns; then, publicly attacking the person reporting them; then, rushing out a “thought leadership” puff piece that raised more questions than it answered; before finally pulling a 180 and announcing that the company would exit the liquidity business entirely²…without ever explaining what had actually gone wrong, or how Carta would change its operating procedures moving forward.
For customers, it was a confusing whirlwind of a week that broke trust and left many considering alternative vendors. For shareholders, including thousands of current and former Carta employees, it was like watching a forest fire, as much of the value of their stock — predicated on Carta’s plans to become “a Nasdaq for private startups” — went up in smoke.
For me, it was déjà vu all over again.
Fourteen months ago I was Carta’s CTO, well-regarded, praised by Ward for “bleeding Carta blue” (then the color of our logo), and working nights and weekends to take care of “the people, the products, and the profits…in that order.” But the more time I spent in Carta’s C-suite, the more concerned I became about the company’s leadership. After witnessing behavior that veered from bad-for-business to ethically questionable to potentially illegal, I met privately with several other executives and board members. When these meetings only increased my unease, I sent a signed letter to the entire Carta board and the company’s general counsel, so that they, from their higher vantage, could assess the merits of my concerns and decide what to do. I — not Ward nor anyone else I reported in my letter — was immediately suspended. A major law firm investigated, and I was questioned for eight hours by a team that included former United States Attorney General Loretta Lynch.³ Days after my interview — on the Friday before Christmas — I was fired “for cause.” A week later, Carta sued me.
And their lawsuit was a real whopper.
I joined Carta in September of 2018. The startup I’d co-founded (and later shuttered) had been an early customer, and so was Slack, where I ran the Machine Learning Services team for just under two years. The technical challenges Carta was facing when I interviewed were a far cry from the problems I’d worked on during my PhD at Stanford, but what drew me to the company was the disproportionate impact such simple technology could have on so many people. Making employees owners — giving them an economic stake in the value they create — isn’t a panacea for capitalism’s uninternalized externalities, but it’s a damn good start. And Carta’s platform had such potential to do good: arming workers with the tools to navigate thorny and unfamiliar tax laws, guiding companies to ensure equal and equitable pay, helping families create and preserve generational wealth. I believed in Carta’s promise, and its mission. And I believed that the systems and institutions responsible for governing the company were fundamentally good and sound, even if they — and the people administering them — were also fallible and imperfect.
I’m not sure I believe that anymore.
It’s hard to keep believing when you read about the sales representative who whipped his dick out at a company event, and was promoted a few weeks later. When you read the texts one manager sent to her Mom about an executive touching her under the table at a work dinner, let alone her claims that she was subsequently “admonished for ‘having her legs out’” and fired after she escalated to HR. When you read that the Head of Corporate Compliance was fired a week after she learned that the People Team had been instructed to stop logging complaints in the company’s whistleblower platform. When the company claims it fired another female executive in part for “taking unauthorized leave,” after she reported to the Chief People Officer that the CEO’s gaslighting and abuse had shaken her so much she needed a day to collect herself…and then, a year later, just a week before her state Human Rights Bureau found that her firing was retaliatory and illegal, sued her. When a CEO who has turned over no fewer than eleven C-suite executives in five years — and settled at least three discrimination cases in the last year alone — has the gall to dismiss all of the people trying to speak up as “sensationalized noise.” It’s hard to believe that the one board member willing to comment on the record about the complaints would say only that “it was not his place to question management.”⁴ And it’s hard to believe Carta’s response to my board letter of October 2022 — trying desperately to signal my worry that the company’s leadership was breaking the law and putting the business at risk — would be to hire a forensic firm to recover a copy of my personal Apple iMessage history and publish private messages with enthusiastically-consenting sexual and romantic partners that had nothing whatsoever to do with the company…and then use those messages as a pretext to falsely accuse me of harassment and discrimination.⁵
It’s all very hard to believe.
The way I usually cope with awful things is humor, but it’s been tough to find the laugh in all of this — even amongst the recent wit and witticism of social media. Seeing my private life deliberately twisted and thrust into the public sphere without the consent of any of the people involved is hard enough to swallow. But for a corporation to do it? Because I tried to blow the whistle? Yuck.
At various times in my life, I have been an expert in different things: the discography of Tom Petty & the Heartbreakers, organizational management principles, reversible-jump Markov chain Monte Carlo. But nobody becomes an expert whistleblower. This turns out to be a major point of contention: “we want people to speak up!” says the company handbook, drafted by expensive lawyers. But as soon as someone does, those same lawyers swoop in: “but not like that!”
So I have to ask: what form of objection would have been acceptable? Who should it have come from? How should it have been delivered? In May of 2019, Henry messaged the company asking employees to come directly to him with problems, instead of using the newly launched whistleblower platform. At a leadership offsite in August 2022, he described his philosophy of management: “Friction is failure,” Henry proclaimed. “If you’re arguing, you’re not doing your job.” In another lawsuit filed against Carta by a former executive, Henry said “I didn’t fire him because of his performance. I fired him because he was complaining to people he shouldn’t be complaining to.” Just a week ago, in the latest Carta scandal, Henry accused a prominent startup CEO of “firebombing” him “for exposure” after the founder posted evidence that Carta had misused customer data. As far as I can tell, the company’s position is that nobody ever speaks up in the right way, or has a legitimate concern. Wrongdoing isn’t the gravest sin: talking about it is.
When I finally decided that — as a fiduciary — I had no choice but to write to Carta’s board, I hoped that my record of accomplishment and my commitment to the company would ensure I was taken seriously. I had joined as a Director with a single direct report, been promoted three times in two years to Chief Technology Officer, and then led engineering through a period of unprecedented growth to a team more than 400 strong. True to the company’s mission, I was an owner: I had invested nearly my entire life’s savings exercising the company’s stock options, and Carta’s success was now my success. I had hired so many amazing senior leaders who were smarter and more experienced than I, and we consistently garnered glowing performance reviews and stellar Employee Voice Survey results. I was being paid a $623,000 a year base salary and had a $3.9M annual equity target. What conceivable motivation could I have to put all of that at risk, unless something was seriously wrong? And if I, a 40-year-old 6’2” cis white guy in the C-suite with a Stanford PhD, couldn’t speak up, who could? Plus, I was writing a private letter to the board, not calling reporters or threatening a lawsuit. What was the company going to do, pretend it was a mistake to have hired me in the first place? Say I was bad at my job? Nobody could stomach that much hypocrisy, right?⁶
Turns out some can. And when powerful people attack your reputation, the mud sticks, no matter how mendacious. Those who know me well or have worked closely with me over the years laughed when they heard the names Henry was calling me. But for the many thousands whose first exposure to me has been Carta’s lawsuit or Henry’s blog post, his calumnies have scored. And it’s tough, too, to blame folks for not tripping over themselves running to my defense, as the company continues its “nuke them from orbit” legal strategy against anyone who dares raise their head.
It’s hard not to cheer when powerful hypocrites are finally called to account: the evangelical preacher caught embezzling funds; the crypto billionaire’s Ponzi scheme revealed. But don’t forget that shame is also one of the most pernicious weapons of the shameless. Telling a female executive that “she was like an alcoholic who needed to admit her problem and have a full-scale recovery from being an asshole” isn’t the worst thing ever done in corporate America, but the effect is still undeniable: to break something, just a little, inside. During a long “coaching” session with Henry, another seasoned executive wrote in her notes: “own it; [the problem is] me; what could I have done better?” Months later, I listened to her read back what she had written and start to cry. Nobody as lucky or as privileged as I has any business looking for sympathy, but attempting to shame someone publicly for their (safe, legal, consensual) private life is some dark shit.
People kill themselves, after all.
Herodotus, in his Histories, tells how Solon advised Croesus to “count no man happy until the end is known,” so it’s still too early for me to say for sure what I’ll take away from this experience. But there is one thing I’m certain of: the only way any of this is going to stop is if we all collectively decide that we are mad as hell and not going to take it anymore. I have always liked Madeline Albright’s quote about the special place in hell reserved for women who don’t help other women, but I think the proper focus should be on power, not gender. What is the point of accruing influence and money and prestige if you won’t use them to help people? Stop saying “this isn’t my job; there’s nothing I can do; I don’t want to know; it didn’t happen to me; it’s none of my business.” Mankind is your business. The common welfare is your business. The dealings of your trade are but a drop of water in the comprehensive ocean of your business.
Late in the summer of 2022, I asked a prominent Silicon Valley founder and investor — who had been close to the company and knew something of its rampant dysfunction — for advice. “If you pop up one-by-one,” they said, “Henry can knock you down. You have to stand together.” Yet what is any ocean but a multitude of drops? It has to start with you, with one person deciding that enough is enough. When you see something, say something. Spend some — not all, but some — of the social and professional capital that you have been working so hard for so long to collect, and stand up for someone who can’t do it on their own. Because let me tell you: nobody can do it alone. When you shrug and move on because you don’t want to make waves, some of the people you leave behind are drowning.
Before I sent my letter to the full board at Carta, I met with Barbara Byrne, the company’s only independent director, and the board’s only woman. We spoke for almost two hours, and the last thing Barbara did was tell me a story about a dispute she’d had at work years before, where her employer sent expensive lawyers to intimidate her. “The only power they have,” she said, “is the power to make you afraid. Don’t let them make you afraid.”
I am tired, disgusted, outraged, disappointed, and incredulous…but I refuse to be afraid. Seeing my good name smeared across the internet is painful and awful — after all, it is my name: I cannot have another in my life. But I have accepted that, if the last five years is going to mean anything, it will have to cost something.
Don’t let them make you afraid.
¹ We are challenging most of these redactions in court.
² This abrupt reversal came forty-eight hours after one Carta board member offered TechCrunch an impassioned defense of the “legitimacy” Carta was bringing to a “messy market”; five days after Linear CEO and Carta customer Karri Saarinen first rang the alarm on social media; and three years after Carta announced the launch of Carta Liquidity, “a new equity paradigm for private companies.”
³ The company has refused to release the report of their investigation.
⁴ After this response was published, the article was updated to “clarify” the board member’s comment, which is reassuring since “asking management questions” sounds a bit like the board’s basic function.
⁵ These claims were so brazen and outrageous that Carta’s counsel was forced to ask the court for leave to withdraw them, and subsequently amended their complaint to do so. But this didn’t stop Henry from circulating the original, unaltered filing in the blog post that he sent to 40,000 Carta corporate customers four months later.
⁶ I also failed to include “accuse me of being ‘hopped up on drugs’ and ‘high’ at work” on my Carta Bingo card, after I notified the exec team and my direct reports that it would take several weeks to recover from the painful surgeries I had on both feet in September 2022. But I think we are meant to believe that implying my planned convalescence was a drug addiction — as Carta did in their public lawsuit — is appropriate corporate behavior, since “Henry does play hardball.”
