Travis Kalanick, the former CEO of Uber Technologies Inc., pushed back late Thursday against an investor’s attempt to force him off the ride-hailing company’s board, saying that a dispute over his control of three board seats must be settled in arbitration.
Kalanick’s move, outlined in a 15-page court filing, seeks to strip Delaware’s Court of Chancery of its jurisdiction over Benchmark Capital Partners’ fraud suit and move what Kalanick called a “public and personal” attack into a confidential setting.
The venture capital firm has accused Kalanick of hiding a series of scandals in order to expand Uber’s eight-member board to 11, in an effort to entrench himself after resigning as CEO in June. Kalanick appointed himself to one of the three seats and has the ability to fill the other two.
Last week, Benchmark, which holds one seat on Uber’s board, moved to expedite the case and asked Vice Chancellor Sam Glasscock III to issue a status quo order that would drastically scale back Kalanick’s voting rights and prevent him from filling the two board seats while Uber searches for a new CEO.
Kalanick plans to move for dismissal, arguing in his response to Benchmark’s lawsuit that the company’s voting agreement contains a broad arbitration provision, which includes Benchmark’s claims and leaves to an arbitrator, and not the court, the question of whether the dispute is suitable for arbitration.
“Benchmark’s claims are subject to mandatory arbitration, and consequently this court lacks subject matter jurisdiction to resolve them,” Kalanick’s attorneys from Williams & Connolly and Potter Anderson & Corroon said in the filing. “Because Kalanick’s motion to dismiss goes to the jurisdiction of the court, it must be resolved before the court enters any scheduling order governing litigation of Benchmark’s claims, permits discovery or grants and relief against Kalanick.”
A spokesman for Kalanick said that he had no comment beyond the filing, and an Uber spokeswoman did not respond Friday to a request for comment.
Benchmark could not immediately be reached for comment on Friday.
Kalanick said that Benchmark and other investors approached him with a resignation letter at a Chicago hotel on June 20, weeks after Kalanick took a leave of absence following the death of his mother. According to Kalanick, Benchmark threatening a public smear campaign if he refused to sign, but at the time did not challenge his right to fill the two board seats.
Benchmark, however, contends that Kalanick agreed to give up the three board seats under his control when he resigned but later refused to follow through with the changes.
Kalanick said in the filing that he received no compensation for any of the statements in the letter, which was not signed by any other party to the company’s voting agreement. He also refuted Benchmark’s position that his role with the company “threatens the sound management” of Uber, saying that the six board members not tied up in the litigation were “disappointed” in the lawsuit.
The lawsuit comes on the heels of a monthslong probe into Uber’s corporate culture after widespread claims of sexual harassment and discrimination became public. Uber is also defending a lawsuit over allegedly stolen trade secrets, and the company faces allegations that some of its top executives had tampered with the medical records of a woman who said she was raped by her Uber driver in India.
Both Kalanick and Benchmark have told Glasscock that they want the dispute resolved quickly, though the sides disagree on the order in which their motions should be handled.
Glasscock has told the parties that he wants to hear the competing motions to expedite and to dismiss the case “promptly” and at the same time. Benchmark and Kalanick have not yet agreed to a schedule, but court papers indicate the sides could brief the issues by the end of next week.
Tom McParland can be contacted at 215-557-2485 or at firstname.lastname@example.org. Follow him on Twitter @TMcParlandTLI.