Match Group is gearing up for war with its most profitable dating app’s co-founders.
Last week, a group of current and former Tinder employees, including co-founders Sean Rad and Justin Mateen, sued Match Group and Match Group parent company IAC for $2 billion over allegations that IAC hid Tinder’s potential for growth in an effort to avoid paying billions of dollars to the startup team.
Tucked into the suit is also the claim that former IAC CEO Greg Blatt, who succeeded Rad as CEO of Tinder, sexually harassed Tinder vice president of marketing and communications Rosette Pambakian, a plaintiff in the case, and that Match allegedly merged Tinder into itself to eliminate stock options without telling any of the employees. It’s a wild lawsuit, and both sides are already fighting ugly.
Match has placed the four plaintiffs who still worked at Tinder on leave following the lawsuit’s filing, and Pambakian’s final memo following her forced departure leaked toBusiness InsiderandFortune. In it, she writes that she joined the lawsuit to “shine a light on the terrible practices I have witnessed from Match, including covering up sexual misconduct by senior executives and depriving talented employees of hard-earned compensation.”
Rad reported the incident to Match’s general counsel, Jared Sine, the lawsuit says, but the company kept Blatt at the helm. Match says it investigated Rad’s complaint and found no wrongdoing, issuing a statement to CNN saying:
“The Match Group Board — with the assistance of experienced outside counsel from two nationally recognized law firms — promptly conducted a careful and thorough investigation under the direction of independent Board members, concluded, among other things, that there was no violation of law or company policy, and took appropriate action.”
Match did not make details of that investigation public.
However, an oldGawkerarticle, published in March 2013, could potentially suggest that the alleged misconduct Pambakian seeks to expose had been ongoing. The piece, written by N. Michelle AuBuchon, recounts a story in which a man referred to as “Jim,” who was the “former head of [her] department [who had] been appointed CEO of a major dating site,” harassed an employee and then demeaned AuBuchon.
Although Aubuchon published this story in 2013, her LinkedIn profile says she worked at IAC from 2008 to 2010. During that time, Blatt transitioned to a new role as CEO of Match.com, according to his LinkedIn page. He subsequently bounced around multiple roles at the company and eventually succeeded Rad as CEO of Tinder in 2016 after working as a Tinder chairman. (Rad then became chairman in Blatt’s place.)
I sit tight at the bar, next to one of the newer assistants. She is a second assistant. Her job is to schedule appointments and pick up lunch for her boss. She works on the executive floor with Jim. She’s getting pretty drunk. I watch over her like a big sister.
Jim saunters up to my little sister at the bar. He talks to her and puts his hands on her legs. I count three people from HR in the room.
Then, he puts his arms around her and elbows me in the process. I tap him on the shoulder and tell him to get out of my space and back off the girl.
”What’s your problem?” he says, “You’ve always had a fucking problem.” Jim can tell I don’t respect him, and I most certainly don’t want to fuck him.
”My problem is you,” I say.
Now Jim is close to my face. The music is loud and everyone is talking. No one sees his fingers come inches from my face as he labels me, “You know what you are?” he says, “You’re just a little fucking cunt.” Each word—little-fucking-cunt—is punctuated by a jab of his fingers pointing closer and closer to my face.
We’ve reached out to AuBuchon but haven’t heard back. Attempts to reach Blatt have also been unsuccessful. To be clear, the current Tinder lawsuit isn’t about sexual harassment — it’s about money and stock options. But the harassment claim against Blatt is prominently featured in the lawsuit. It doesn’t seem like the author or anyone else reported this incident to the nameless corporation, so the company might not have known the extent of this man’s actions, however.
Meanwhile, a source close to Tinder says that Rad actually sold a great deal of stock following the merger between Tinder and Match Group, and suggested that the co-founder didn’t have much faith in the future of the dating app and that Match’s valuation was accurate. According to SEC filings, Rad exercised about half of his stock options in Match on August 4th and 6th, which Match repurchased for a net pay out of $94,413,552.06 based on a closing price of $18.89 per share. His other half was exercised on August 9th and he received net 816,805 shares of IAC stock.
Tinder’s always been surrounded by drama. It faced a previous lawsuit in 2015 in which former VP of marketing Whitney Wolfe Herd claimed she faced rampant sexism and dealt with sexual harassment from Mateen. The case was settled out of court and Mateen was forced out of the company. Herd later went on to found Tinder competitor Bumble, which Match sued in March over alleged patent infringement.
Driving all of these lawsuits, of course, is money. Tinder represents the biggest area of growth for Match Group and IAC and has propelled Match’s stock price to reach more than $40 a share, from $18 last year. As Tinder keeps growing, this lawsuit is definitely only going to get uglier.