Benchmark the venture capital firm and the early investor in Uber, is suing the former Uber CEO and Cofounder Travis Kalanick for fraud, breaches of fiduciary duty and breaches of contractual obligations. The complaint was filed on Thursday in the Delaware Chancery Court.
In the complaint, Benchmark alleges Kalanick’s overreaching objective was to pack Uber’s Board with loyal allies to help him insulate his prior conduct from any scrutiny. This would also clear the path for his eventual return as CEO, which Benchmark claims would be detrimental to Uber’s stockholders, employees, driver partners and customers.
The lawsuit seeks to force Kalanick off the board, nullify a June 2016 agreement that created three additional board seats and rescind his ability to fill those three seats. The lawsuit also aims to permanently remove Kalanick from Uber’s board and ban the cofounder from participating in Uber’s CEO replacement process.
The June 2016 agreement allowed Kalanick to expand the size of Uber’s board with three additional seats, giving him the sole right to designate those seats. According to the lawsuit, Kalanick held the power to name one of those three seats for himself after his resignation, while the other two seats could remain unfulfilled. Benchmark’s argument hangs on the statement that they would never have granted Kalanick those extra seats had they known about Kalanick’s “gross mismanagement and other misconduct at Uber.” Benchmark argues Kalanick’s misconduct invalidates the board’s vote to enlarge the board. This misconduct, according to the lawsuit, includes pervasive gender discrimination and sexual harassment, hiding the existence of confidential findings and nondisclosure of material information.
Currently, Uber Technologies Inc., is also fighting another lawsuit from Alphabet Inc., for allegedly stealing trade secrets. Alphabet Inc., is claiming their former employee Anthony Levandowski stole 14,000 files from Alphabet before starting his self driving startup Otto, which was later acquired by Uber. According to the new lawsuit by Benchmark, Kalanick did not disclose to the board what he knew about Alphabet’s allegations of trade secret misappropriation before Uber acquired Otto. The lawsuit also states another lawsuit from Waymo, presents significant legal, financial and reputational risks to Uber. It claims these risks could have been reduced or avoided if Kalanick had disclosed crucial facts about his own apparent knowledge at the time of the Otto acquisition.
Travis Kalanick, who was allegedly trying to ‘Steve Jobs his way back’ into the company, was forced to resign after Benchmark partner Bill Gurley, led the effort to oust the CEO from the company. Uber has declined to comment on the issue.
