Startup CEO Fired for LSD Use Claims Discrimination in Lawsuit

(Bloomberg) -- The former chief executive of a high-flying technology startup who was fired for using LSD sued the company and some of its venture backers, claiming the real reason for his termination was his East Asian background.

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Justin Zhu, who was fired from Iterable Inc. last year after disagreements with his investors, claims in a complaint filed in state court in San Francisco that the company's stated reason for firing him, that he violated company policy by using an illegal drug, was "pretextual and a subterfuge."

His firing came after the issue of discrimination against Asian Americans became a national conversation following the 2021 killings of eight people in Atlanta, most of them women of Asian descent. That spring, Zhu helped organize Stand with Asian Americans, a coalition of executives who condemned violence and pledged donations to help victims. The issue came up during a meeting with Iterable investors Murat Bicer and Shardul Shah, according to the complaint.

``They stated that if he cared about Asian causes, he could invest in them, not serve the goal by being a role model as CEO,’’ Zhu said in the complaint. ``Shardul pointed to the statement by a potential investor who said that Justin did not look like an enterprise CEO. The potential investor stated that the company’s Caucasian COO looked more like a CEO than Justin did.’’

Bicer, a partner at Charles River Ventures was also named as defendants in the suit. Zhu’s lawyer said he filed an amended complaint on Monday in which Shah, a partner at Index Ventures SA, was removed from the list of defendants.Iterable didn’t have an immediate comment on the lawsuit. Charles River Ventures and Index Ventures didn’t immediately respond to requests for comment.

Zhu said in the lawsuit that he took a small amount of LSD before a 2019 investor meeting and his body "was more sensitive to the dose than he expected," affecting his vision. He said the experience brought a positive change to his work life, helping to alleviate his depression and anxiety during a difficult fundraising process. He later raised more money for Iterable, bringing it to a unicorn valuation.

In the lawsuit he noted that several studies suggest psychedelic drugs may have benefits for people with depression and other psychological problems.

When his investors, already pushing for him to step down as CEO , learned of the incident around May 2021, they cited it as a reason to remove him from the top job, according to the lawsuit. In a surprise meeting with board members Bicer of Charles River Ventures and Lee Wittlinger of Silver Lake, he was fired. Wittlinger is also named as a defendant.

Silver Lake didn’t immediately respond to a request for comment.

Stand with Asian Americans has since created a forum for Asian Americans to report workplace discrimination and seek support. While Asian Americans often account for a significant portion of the workforce within big technology companies, they are less likely to break into leadership ranks.

The case is Zhu v. Bicer, Case No. CGC-22-602938, Superior Court of the state of California (San Francisco). Read more: CEO of $2 Billion Startup Ousted for Taking LSD at Work

(Updates with lawyer’s comment)

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