Some of the founders and current executives of Tinder, as well as some earlier employees, are suing the dating app’s owner and its subsidiary, claiming that they have been robbed.
The lawsuit is against IAC and its subsidiary Match Group, where the plaintiffs, Tinder’s founders Sean Rad, Justin Mateen, and Jonathan Badeen, and three current senior executives, are saying that they “robbed Tinder employees by manipulating financial information, undermining Tinder’s valuation and unlawfully stripping away their Tinder stock options.”
The case was filed in New York State Supreme Court in Manhattan earlier this month. The plaintiffs are asking for at least $2 billion.
According to the suit, IAC and Match had manufactured a “lowball” valuation of Tinder and then “extinguished Tinder stock options entitling the employees to valuations in 2017, 2018, 2020 and 2021.” This let the defendants pocket the money that otherwise would have been owed to the plaintiffs.
“We were always concerned about IAC’s reputation for ignoring their contractual commitments and acting like the rules don’t apply to them,” explained Rad, Tinder’s first CEO.
“But we never imagined the lengths they would go to cheat all the people who built Tinder. The Tinder team – especially the plaintiffs who are currently senior leaders at the company – have shown tremendous strength in exposing IAC/Match’s systematic violation of employees’ rights,” he added.
IAC and Match Group issued a statement:
“The allegations in the complaint are meritless, and IAC and Match Group intend to vigorously defend against them,” the companies said. “Since Tinder’s inception, Match Group has paid out in excess of a billion dollars in equity compensation to Tinder’s founders and employees. With respect to the matters alleged in the complaint, the facts are simple: Match Group and the plaintiffs went through a rigorous, contractually – defined valuation process involving two independent global investment banks, and Mr. Rad and his merry band of plaintiffs did not like the outcome.”
“Mr. Rad (who was dismissed from the Company a year ago) and Mr. Mateen (who has not been with the Company in years) may not like the fact that Tinder has experienced enormous success following their respective departures, but sour grapes alone do not a lawsuit make. Mr. Rad has a rich history of outlandish public statements, and this lawsuit contains just another series of them. We look forward to defending our position in court.”
The lawsuit also accuses IAC and Match of designating Match’s chairman and CEO, Greg Blatt, as interim CEO of Tinder in December 2016 to allow them to “control the valuation of Tinder.”
“Because a credible investigation — let alone a firing in public view — would have derailed their scheme, Defendants whitewashed Blatt’s misconduct,” said the suit.
“But just two weeks after their scheme concluded, Defendants publicly announced Blatt’s ‘retirement’ — rewarding him with a lucrative golden parachute and a glowing farewell message from Diller praising Blatt’s ‘integrity,'” the suit also alleged.
Orin Snyder, an attorney for the plaintiffs, said: “This is an open-and-shut case. The defendants made contractual promises to recruit and retain the men and women who built Tinder. The evidence is overwhelming that when it came time to pay the Tinder employees what they rightfully earned, the defendants lied, bullied, and violated their contractual duties, stealing billions of dollars. A jury will now hold the defendants responsible for their multibillion-dollar theft.”