One not completely obvious lesson that can be drawn from this, has to do with preventing cases like this from being filed in the first place. If you look at the last exhibit in the complaint, even at the very end the CEO (Rad) could have negotiated what sounds like a very modest settlement if he had been willing to be a little understanding and flexible. Instead he went into some legalistic lock down mode and refused to consider even a token severance.
Now perhaps before signing anything Ms. Wolfe would have consulted a lawyer and so there would have been a lawsuit anyway. And as a disinterested observer, I would kind of hope so. But the pragmatic lesson for people who might be in a similar situation is that a little humility and understanding can go a long way. I'm reminded of the study finding that doctors who apologized for medical mistakes ended up being sued less often for medical malpractice.
Of course, by far the best thing is to avoid such situations altogether!
Even if she got a lawyer, that doesn't mean there would be no settlement. Her lawyer would highlight the stuff on page 6 and 7, in which corporate policy was apparently that having a "girl" as cofounder devalues the company, and ask for more money. And, if they were smart, they would have agreed. Insurance might have even covered it.
It's not fool-proof; sometimes people are treated so awfully that they want the feeling of justice from a trial. As you say, best to avoid these situations altogether.
Instead he went into some legalistic lock down mode and refused to consider even a token severance.
I can see going into some kind of "legalistic lock down mode" if you suddenly are worried about a lawsuit, but in that case it might be prudent to get an actual lawyer's advice. I'm not a lawyer myself, but it seems unlikely that the CEO's actions here are something that the company's lawyer would've advised. It sounds like she was asking for honestly much less than she should've been asking for, and unless there's something I'm missing, I can't believe it was in the company's interests for him to refuse that offer. She was offering to resign in return for quite modest severance conditions, and my guess is that a corporate lawyer would've been happy to advise the CEO to accept the offer and close the affair.
Now perhaps before signing anything Ms. Wolfe would have consulted a lawyer and so there would have been a lawsuit anyway. And as a disinterested observer, I would kind of hope so. But the pragmatic lesson for people who might be in a similar situation is that a little humility and understanding can go a long way. I'm reminded of the study finding that doctors who apologized for medical mistakes ended up being sued less often for medical malpractice.
Of course, by far the best thing is to avoid such situations altogether!