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Comment by kldaace | Hacker News Reader

I feel bad for those 340 employees. I can't imagine what it would feel like to have years of your work be exposed as (basically) a farce. I can barely stand working a week without getting results much less x years of my professional life.

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I wonder, would one have legal recourse in such a case? Is it conceivable, in principle, to seek remedy for damages arising from your stunted career?

Any litigation experts care to weigh in? What would need to be established beyond the obvious (e.g. that damages were committed)? Has anything of this sort occurred in the past?

It's not likely that any of these employees can reasonably claim a tort or breach of contract here. The company messed up, but luckily it's not illegal to disappoint your employees.

Not that I think Theranos should not face some consequences, I just think drawing the line would be highly fraught.

Well my reasoning was that Theranos' criminal fraud might taint a given employee's CV. It seems like prima facie it might be possible to argue that this translates into monetary damages.

If you hung around for too long at the place that might signal the capacity to put up with institutional corruption. It's a character trait viewed positively in some places.

Back to academia with you!

It's your choice to continue working at the company during hints of fraud. Anyone concerned about it tainting their future should have left 6 months ago.

Thank god this is not possible. Every employee that joined a failed company would have the potential for litigation.

Also, I think the fundamental premise that working for a failed or even fraudulent company would taint your resume is false, unless you were at a level where you were responsible for some of those fraudulent decisions. If some company is looking for a lab tech they would be stupid to write someone off just because they worked for Theranos.

No, it's too bad it isn't possible. This isn't about a "failed company", this is about outright fraud. Having Theranos on your resume now is going to be a huge resume stain, and probably prevent you from getting any kind of decent job. It's completely normal for hiring managers to discriminate based on odd factors like this: what school you went to, what other companies you worked for, etc.

These employees absolutely should be able to sue for damages. They aren't responsible for their executives' fraudulent actions, but they're harmed by them.

> Having Theranos on your resume now is going to be a huge resume stain, and probably prevent you from getting any kind of decent job.

From my own history I've seen this to be false. I was previously at a place that had a lot of ex-Enron employees (after Enron imploded). I think most smart employers understand the vast majority of people at places like Enron or Theranos are not "tainted" by their employment and just had the misfortune of working for a company with ethically challenged management.

"seek remedy for damages arising from your stunted career"

Stunted career? As adults I'm sure they would have been capable of leaving any time they wanted from legal point of view. It's not goverments job to protect people from partaking in risky ventures. Who would want to create a startup after litigating "too risky product that turned out to be bogus".

Only it doesn't really work like that. A lot of the employees would have been innocent. Secretaries, lab workers, mechanics, janitors, scientists. These weren't risky ventures, they were a job. While they might have been able to leave at any time from a legal point of view, not all of them would have known that it was that risky. You know, because it is a job. It is a bit different if you are investing money in it, getting paid less, and so on.

And lets not forget this wasn't really a small operation: Over 300 employees. Multiple cities.

And the government does do some things to protect workers - such as unemployment and labor laws. But again, this is different than protecting risky investments. I'd even argue that this is partly the governments job by requiring disclosure of known risks and by prosecuting folks taking advantage of others - the rest is the discretion of the money holder.

I wonder how many of them knew and were accessories to whatever crime took place, be that legal or (merely) ethical.

Yeah. Having the big "T" on the resume might be one of the few red flags signalling fraud and corruption worse than a few years at SAC capital after a internship at Enron and Lehman Bros. Maybe the employees themselves will sue the company for fraud and damage to their careers. Crazy situation.

They'll probably change their name (why hello Accenture), and the people associated can now put the untainted name on their resume.

Heh, had no idea about that one!

I had recently been thinking about how terrible it would be to have a resume with a Wells Fargo job ending in the last couple months.

That's a good point, but I would hope employers would be able to distinguish situations clearly created solely on:

a) the upper management level (Wells Fargo, Theranos)

from:

b) the employee level, whereby the employees themselves use private data for advantage and personal gain - DraftKings comes to mind here[0][1]

[0] http://www.nytimes.com/2015/10/06/sports/fanduel-draftkings-...

[1] http://www.businessinsider.com/draftkings-daily-fantasy-spor...

I disagree. 5,300 low level employees actively chose to create fictional bank accounts in order to meet their goals. Even if some middle management tier recommended that they do it, I think it says something about the moral fiber of every one of those employees to be complicit in that.

Working at SAC Capital is only a black mark on your name to those outside of finance. Within the world of hedge funds SAC alumni are doing extremely well:

http://www.bloomberg.com/news/articles/2016-02-23/sac-alumni...

in other words, its only a black mark from people who dont matter anyway

Those outside of finance don't know what SAC is.

That's very interesting, and it makes some sense now that you mention it. After all, SAC made it clear to investors that that would cover all of the legal expenses and fines, so they were just left with returns from the fund itself, and insider trading works.

SAC Capital is a much bigger stain for former employees than the others, in my opinion. SAC allegedly had a deeply ingrained culture of finding and exploiting insider knowledge that permeated multiple levels. Basically, Cohen had employees do his dirty work, while he maintained plausible deniability.

At Theranos, by contrast, Holmes intentionally kept employees in the dark. If I were interviewing an ex-employee, especially one at a lab outside of California, I would certainly press the candidate on the issue, but I would be willing to believe that they were honestly trying to build and deploy a novel technology that never ended up working. It is not the case that the entire endeavor was a scam. They thought that they could develop this technology, and then the leadership covered it up as they were failing to do so.

Also, do you have any sources that document employment at Lehman Brothers as being a stain on the majority of their employees? Thousands of the employees immediately moved to Barclays and Nomura when they bought parts of Lehman Brothers. That doesn't sound like a horrible stain to me.

Are you serious? You would press employees on the behavior of their CEO?

I don't know about ryporter, but I sure would. I'm looking for people who are both smart and of good character. Working for what is apparently a giant fraud suggests that they may lack one or both of those attributes. I'd definitely have them talk about their experience there and what they learned, and I'd be looking both for their emotional reactions and the actions they took.

As an example of somebody who handled working at dubious place well, consider this blog: http://liesandstartuppr.blogspot.com/

So you would press anyone who has worked for Google and Facebook as well right?

How do you mean? Both of those are functioning businesses that build products that actually work. I'd have different concerns about people at those companies, but I wouldn't be asking them, "So when exactly did you realize it was a fraud and what did you do then?"

I appreciate the comment, though I think the situation is often more nuanced - a junior employee may simply not have all the facts, and a more senior one may either have a 'gag order' on exit or worried that saying anything negative will affect their chances with future employers. Whistleblowers can end up harming their careers despite doing the right thing, and a halo doesn't pay the mortgage or buy the kids Christmas presents.

But onto Theranos - I just posted something on this at my blog. More than the employees, look at the Board of Directors and ask why they didn't do their jobs and enforce change. If they can't alter the ridiculous plans of the Founder/CEO due to the voting structure then they should resign. It's not their full time job, they won't go hungry if they leave, so what is their excuse for not speaking out?

Oh, yeah, I'd expect a junior employee to not figure it out right away. I'd just be looking to see what they noticed in retrospect. And senior employees can have their own legitimate reasons for saying. I'm not saying I wouldn't hire them. I'm just saying I'd ask.

For me it's similar to having worked for a failed startup. I have no problem with it, but I'm definitely going to ask. The difference between a bad failure and a good one is how much you learn.

I am serious, and I didn't say that. I would press them on what they knew and when, and I'd be willing to believe that they didn't know much more than readers of the WSJ did.

We happily hired people from Lehman after the financial crisis. Sometimes bad things happen to good people, and it is tragic that the good people frequently overestimate their role in one-off events.

I work in IT so I'm used to weeks without results.

But yeah this is going to be a huge black mark on people's resumes and how the hell do you hide 3 years with a company that was basically all about committing fraud?

"I didn't know and I was doing good work," probably isn't going to fly.

I think it depends upon the role.

Working as a researcher in one of the labs committing the fraud? I can't imagine you getting a job with a reputable company for years.

Working as a developer on their website? It's entirely conceivable you had no idea what was really going on.

Hopefully people will be level-headed about this sort of stuff.

I do too, but having met several people who worked there briefly and left, I wonder how many of those 340 have even been there for years. Seems like they have a lot of writing-on-the-wall related churn.

Feel bad for some of them, not the ones who delusionally chanted "F--- you, Carreyrou!" at the all hands meeting after the big scam started coming to light: http://www.vanityfair.com/news/2016/09/elizabeth-holmes-ther...

Was there any point in time where a reasonably skeptical person wouldn't have thought that Theranos is a scam company?

As far as I know they never provided any scientific data that their product works. What do you expect working for such a company?

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