Zenefits to employees: Do not ‘smoke, drink, eat, or have sex’ in the stairwell

Last time we tuned into Zenefits’ saga, founder Parker Conrad resigned as CEO, regulators were scrutinizing the health-insurance brokerage startup and the company installed a new leadership team.

CEO David Sacks then admonished the company for an “inappropriate” corporate culture that possibly gave rise to the company running into legal troubles. Specifically, the company was found to have developed software that allowed sales rep trainees to obtain an insurance license more quickly.

Now we are learning more about Zenefits’ struggles to mature in a highly regulated industry.

How rowdy was the Zenefits’ work hard, play hard culture?

The Wall Street Journal reported that in June, Emily Agin, Zenefits’ head of real estate and workplace services, sent a note to the San Francisco office about another issue: Sex in the stairwell.

As she put it:

It has been brought to our attention by building management and Security that the stairwells are being used inappropriately….Cigarettes, plastic cups filled with beer, and several used condoms were found in the stairwell. Yes, you read that right. Do not use the stairwells to smoke, drink, eat, or have sex. Please respect building and company policy and use common sense….

Last week, Sacks got serious and banned alcohol at the San Francisco-based tech firm, as BuzzFeed News reported.

On drinking, Sacks, in a memo to employees, banned alcohol, because, as he put it, “it is too difficult to define and parse what is ‘appropriate’ versus ‘inappropriate’ drinking in the office.”

BuzzFeed described a “fraternity-like atmosphere, with whiskey shots, kegs, and bottles of champagne.”

“We must admit that the problem goes much deeper than just process,” Sacks told employees in his memo. “Our culture and tone have been inappropriate for a highly regulated company.”


Photo: David Sacks is the new CEO of Zenefits. (Courtesy Zenefits)


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