Former Everyrealm execs sue company for sexual harassment, race discrimination • TechCrunch
Everyrealm, a metaverse real estate company that spun out of Republic’s crypto arm in February, is facing two lawsuits first filed in August from former directors at the company who allege they each faced numerous, separate instances of discrimination and harassment while working there. In addition to the company itself, multiple Everyrealm executives are also named as defendants in the suit, including CEO Janine Yorio and co-founder Julia Schwartz.
Today, Seppinni LLP, the employment law firm representing both plaintiffs, filed amended complaints on behalf of each in federal court in the Southern District of New York, where the case is being tried. The amended complaints, from ex-NFL player Teyo Johnson, who worked as Everyrealm’s director of strategic partnerships, and Katherine Yost, the company’s former HR director, contain several new allegations of sexual harassment that they claim occurred at the company.
If the judge overseeing the proceedings determines that these allegations constitute a sexual harassment dispute under a bipartisan law that President Biden signed in March to end forced arbitration for such cases, both lawsuits will go to trial despite Everyrealm’s push to compel arbitration. If that happens, these could be the first-ever cases in the U.S. to which the new law — the Ending Forced Arbitration of Sexual Assault and Sexual Harassment Act (EFA) — is ever applied in court, the plaintiffs’ attorney Shane Seppinni told TechCrunch in an interview.
The new allegations in Johnson’s amended complaint state that he experienced “unrelenting sexual harassment” throughout his time at the company, including instances of sexually explicit remarks, jokes and tirades. Specifically, Johnson’s amended suit claims that Yorio and Schwartz made unwelcome comments regarding his sex life and his then-girlfriend’s menstrual cycle and that Yorio pressured him to have sexual intercourse with coworkers and clients as part of a “game” employees referred to as “Know Your Personnel.”
The amended complaints from both Johnson and Yost also include what Seppinni claims are screenshots of text messages between Yorio and an Everyrealm employee (who Seppinni declined to identify) that show Yorio allegedly referring to other employees by terms such as “pussy” and “dolt.” The plaintiffs included these images to support their allegation that Yorio created a hostile work environment at the company.
Johnson’s original lawsuit from August already included a claim that Yorio made inappropriate comments about his appearance, which his team is arguing constitutes sexual harassment. The full complaint also includes allegations separate from sexual harassment, such as that Johnson, who is Black, faced pay discrimination at the company and that Yorio made racist comments toward Johnson such as calling him “a stupid Black person,” “the whitest Black person,” and threatening to “trade” him if he did not perform in his role.
A spokesperson for Everyrealm denied the allegations in an emailed statement to TechCrunch and pointed to the company’s publicly filed legal motions in the case but did not provide further comment. Yorio, meanwhile, had not responded to TechCrunch’s request for comment on the lawsuits by press time.
Both Johnson and Yost were terminated from their employment at Everyrealm before they filed the lawsuits. Yost’s suit suggests her termination was an unlawful act of retaliation from the company against her because she had spoken up about its leave policy, while Johnson’s suit alleges he was terminated because of his race as a result of discrimination. Johnson also claims he faced retaliation from the company after he pointed out to executives that a proposed crypto gambling initiative they had wanted to undertake was potentially illegal.
Everyrealm’s journey through the metaverse
Everyrealm spun out of alternative asset crowdfunding platform Republic’s crypto arm in February, the company told TechCrunch at the time. The startup, which describes itself as “building the gateway to the entire metaverse ecosystem,” announced concurrently that it had raised $60 million in a Series A round led by Andreessen Horowitz (a16z) at what PitchBook data suggests was a $195 million valuation.
The company purchases and develops virtual land properties, which are sold as NFTs, in metaverse worlds such as Decentraland and The Sandbox. It also runs a virtual educational academy in the Somnium Space metaverse, for which students pay $1,000+ each to learn about web3 concepts.
Although Everyrealm is an independent entity separate from Republic, Republic and its subsidiary Republic Crypto are both named as co-defendants alongside Everyrealm in Johnson’s and Yost’s lawsuits. As of March, Andrew Durgee, head of crypto and tokenization at Republic, was also working as a managing director at Everyrealm and serving on its board of directors, an SEC filing shows.
“OpenDeal Inc. dba Republic and its subsidiaries were improperly named in the Yost and Johnson lawsuits; the complaints and related pleadings and motions makes no specific allegations against any persons currently employed by, nor any entities under the control of, Republic,” a spokesperson for the office of Republic’s general counsel wrote in an emailed statement to TechCrunch.
The statement noted that Republic Crypto “remains a service provider to numerous clients in the Web3 space, including certain affiliates of Everyrealm.”
Yorio, who began leading Republic’s metaverse real estate investing efforts in 2020, told TechCrunch in February that the Everyrealm fundraise was one of the largest Series A rounds ever raised by a company with a female CEO. Coinbase Ventures, Lightspeed and Dapper Labs also participated in the round, as well as several celebrity angel investors, including Paris Hilton.
In Johnson’s amended lawsuit, he claims that Everyrealm’s general counsel, William Kerr, and other company executives, repeatedly referred to Hilton by the nickname “A Night in Paris,” which Johnson’s team believes constitutes sexual harassment. The nickname, according to Johnson’s complaint, refers to a revenge porn video of Hilton that was leaked online in 2004 without her consent.
a16z’s Cultural Leadership Fund (CLF), whose mission is to support Black employees in tech, allegedly played a key role in facilitating many of the introductions between Everyrealm and its celebrity investors, according to Johnson’s suit. The venture firm has not publicly commented on any of the allegations made in Johnson’s or Yost’s lawsuits.
Spokespersons for a16z and a16z’s CLF had not responded to TechCrunch’s requests for comment on the lawsuits by press time.
Will the cases go to trial?
After Johnson and Yost filed their lawsuits in August, Everyrealm responded by filing a motion and countersuits against both plaintiffs to compel them to drop their court cases and instead go through an external arbitration process, court records show. Everyrealm is arguing Johnson and Yost signed contracts agreeing to arbitrate any legal actions against the company when they were hired and that they are in violation of those contracts and therefore are obliged to go through the arbitration process.
Johnson and Yost, for their part, are arguing that Everyrealm doesn’t have the legal grounds to force them to go through the arbitration process because the instances of alleged sexual harassment they note in their lawsuits occurred after the EFA had already been signed into law and taken effect on March 3.
On October 9, court records show District Judge Paul Engelmayer granted both plaintiffs a leave to amend their complaints to include more details around their sexual harassment allegations. Judge Engelmayer will then determine whether the cases in their entirety will go to trial or will be tried in arbitration, though the expected timing of that decision remains unclear.