A former Beast Industries employee is suing MrBeast’s media production company over claims of sexual harassment and workplace gender bias. Our resident HR advisor, Jane Harper, unravels what went wrong and how founder-led companies can mitigate the risk of non-compliance.
The rise of the creator economy has birthed all sorts of companies. Most common are founder-led, brand-obsessed media houses. But it doesn’t mean you can ignore the basics of human resources and labor law.
For HR professionals, the recent lawsuit filed by former employee Lorrayne Mavromatis comes as a glaring red flag. When a company’s culture is built to mirror a founder’s personal brand, HR often gets stuck in a pendulum.
The recent lawsuit filed by former employee Lorrayne Mavromatis against MrBeast’s media production company is a red flag. (Image: Pexels)
A cool company culture can be your worst legal nightmare
What happens when founder-led companies fail to grow up? Currently, most founder-led companies run without an HR department, where a PR firm prioritizes the creator’s image over the rights of the employees.
The Lorrayne Mavromatis lawsuit comes as a case study on what happens when a startup outgrows its lack of a professional environment. Mavromatis claims she was met with a boys club culture where sexual harassment was tolerated, and she was openly treated as an inferior to her male coworkers. When she asked why she was being sidelined, the CEO allegedly told her that her physical appearance had a ‘sexual effect’ on the founder. Rather than addressing these grievances, HR reportedly dismissed the claims as ‘unsubstantiated’ and fired her three weeks after she returned from maternity leave under the pretext that she was too high-calibre for her position.
It doesn’t matter how much revenue you earn or how many aura points you collect on X. You cannot ignore Title VII or FMLA protections. You can’t present the ‘boys will be boys’ excuse in front of a jury.
So, what is actually in charge in such companies?
According to the lawsuit, the head of HR was the founder’s mother. It’s a given that things can get tricky when HR has personal or family ties to the CEO. This often makes employees terrified of speaking up or reporting incidents as grave as sexual harassment.
The lesson here is clear. If a complaint involves a high-profile founder, you must bring in an independent third party to handle the investigation.
It’s not an employee’s job to ask for basic rights at work. In this case, Mavromatis claims she was pressured to work via Slack while she was in the hospital for the birth of her child. HR has to step in to set hard boundaries to stop employees from working during protected leaves.
The most damaging claim of all is the existence of a department where employees were allegedly stashed after they called out red flags. Moving an employee to a dead-end role right after they file a grievance is retaliation. If even you phrase the termination right, you might overlook evidence that your reason for letting the employee go was a lie.
How to stop
Every company has a unique workplace culture. An HR’s job is to ensure that the office environment remains professional for all of its employees. If you’re an HR in a startup, it’s important to find and fix the disconnect between unspoken pressures at work and the legal protections written in the handbook.
