This startup’s management problems can teach companies how to treat people better

On Tuesday, Racked published a blockbuster exposé on the corporate culture of Thinx, a startup devoted to creating period-proof underwear for women. It’s a doozy. Thinx was co-founded by Miki Agrawal, who recently stepped down from two positions at companies she founded: CEO of Thinx and the “pee-proof” underwear company Icon, where she adopted the title “SHE-E-O” instead of CEO.

Agrawal has made a business out of branding feminism onto her products. Thinx became well-known in New York City for its provocative advertisements of suggestively cut fruit. Under Thinx’s capitalist form of feminism, Thinx is not just selling a menstrual product, but “patriarchy-proof underwear.” The company has also taken its ardently feminist approach overseas: In January, Thinx launched a nonprofit branch that will support education for girls in Sri Lanka and India.

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These sound like sound corporate values for a startup dedicated to products for women — but according to employees who talked to Racked, Thinx didn’t quite live up to the values it touted. The employees claim a damning disconnect between the company line and their personal experiences.  Ladders has reached out to Thinx for comment and will update accordingly when we get a response.

Here are the big lessons we can learn from their cautionary tales.

Don’t be ageist: ‘Oh you’re in your twenties, you don’t need a lot of money.’

Employees are paid according to experience, not according to age — and in fact, age discrimination is illegal. While in practice, that affects older workers more, younger workers should also be treated with dignity at work.

In salary negotiations, Agrawal would “go back to the fact that we’re young, and just be like, ‘Oh, you’re in your 20’s. You don’t need a lot of money,'” according to one former employee. Several Thinx employees said they took a pay cut below the market-rate of their jobs because they believed in Agrawal’s vision. A second employee confirmed the hostility in salary negotiations, saying Agrawal acted like it was “selfish to take a salary representative of your worth.”

This is coming from an executive who recently lamented about the “cray stats” women in the workforce face, including the how the gender pay gap across all occupations is close to 76%. (For those unfamiliar, “cray” is slang for “crazy.”)

Even worse, not all employees faced the same pressure in salary negotiations: employees said the only people who were able to successfully negotiate for more money were the company’s white men, creating an atmosphere of favoritism. As a recent study proved, favoritism in the workplace promotes toxic rivalries and can cause employees to quit.

Being a good manager means every employee should be able to negotiate for more money. It also means companies should not use age or gender as dividing lines in pay and stick to experience and performance. One relieved former employee said “quitting was the feminist decision.”

Crossing personal boundaries: ‘I need smiley faces. I need exclamation points. I need love in your voice.’

The common thread in many of the complaints made against Agrawal was how she continuously crossed interpersonal boundaries, expecting employees to be her friends rather than workers devoted to a common goal. That meant Agrawal even policed employees’ moods, former workers said.

Agrawal seemed intent on building a chirpy corporate culture. She discussed her “need” for smiley faces and “love” in her employees’ voices as a positive part of Thinx’s looser corporate culture on a Forbes podcast.

This might be too much to ask. Companies can ask employees to show dedication, but demanding a certain emotional state at all times can be, ironically, dehumanizing. Employees should save love for — people they actually love, like friends and family. At work, respect and kindness is more than enough.

Live your values

Describing her company’s culture, Agrawal said she promoted direct discussion: “If you have an issue, don’t go talk to someone else about it. Go talk directly to the person about it. Face them, because that builds courage for yourself. Hashtag adulting.”

There are two problems with that policy.

The first is that talking down to employees with glib reference to social media memes cheapens them. The #adulting hashtag on Twitter and Facebook is frequently ironic, and it’s condescending.

The second problem: employees said Agrawal couldn’t follow her own advice. When employees talked to her, she complained about it.

When Thinx’s staff held a come-to-Jesus meeting last March about their reduction in benefits, Agrawal accused her workers of staging “a coup.”

The company had no formal human resources department, and this was a situation where some clear-eyed mediation could help: translating between the feelings of a CEO and the pay expectations of workers.

In the meeting where Agrawal said she was stepping down as CEO, Thinx leadership said they were going to finally hire an employee to handle human resources.

Know the line between warmth and emotional manipulation

In her origin story for The Cut, Agrawal recounted how she turned a tenuous connection with an investor into a real connection by pretending there was a bond between them and telling him she was “proud of him.”

It’s a technique she still uses: “I often find myself saying things like, ‘I’m proud of you.’ It implies familial bond, like a proud parent.”

While positive reinforcement is strong, managers should watch the intent behind it: the office is for work, and home is for parenting. A CEO that tries to parent employees may be crossing a line.

The use of emotional bonds to manage someone can take on a “Machiavellian tinge,” a Harvard Business Review article reminds us— if bosses “develop a friendship because it might serve” them.

Agrawal signing professional emails “LOVE YOU!!! Xoxo” for instance, would cross a line in many companies.

The emotional string-pulling went further. Racked reported that Agrawal ordered three employees to write positive reviews on Glassdoor, a popular careers website. The goal, she suggested, was to contradict other reviews calling her “Trump-like” and filled with “Stalin-like paranoia.” Agrawal’s pressure on employees went beyond encouragement: she said to one employee who didn’t want to write a positive review that there was “no other option.” That’s a scary thing to hear from someone who controls your paycheck.

In response to this story, Glassdoor reached out to Ladders to emphasize that, “although employers can request honest & balanced reviews, incentivizing employees to leave positive reviews is not allowed. If we learn of such a situation, we conduct a thorough investigation [and] remove content in question where needed.”

A company for women with terrible maternity leave and employees unable to afford birth control

Thinx is not a struggling startup where everyone is making sacrifices for the greater good. Fast Company confirmed that in 2016, Thinx made tens of millions of dollars in revenue. Seeing that money pouring into the company, with no benefit to them, was galling for underpaid employees.

Despite Thinx’s woman-positive message, one employee said she couldn’t afford birth control: the company’s cheapest health care option cost a $200 monthly premiums.

The maternity-leave policy at Thinx was limited too: just two weeks of full pay and a week at half-pay, far behind the industry standard of 20 weeks.

Trust is powerful. Don’t abuse it.

The most important lesson Agrawal and her company failed in every instance to follow was not practicing what they preached. That’s the basic advice Ask A Manager urges all bosses to follow: “Do what you say you’re going to do, by when you say you’re going to do it, or update people accordingly.”

When companies break promises, they lose their employees’ trust. One current employee who wrote a Glassdoor review this January summarized their anger towards Thinx management failure with this: “How can you empower people with your products if you don’t know how to empower those behind it?”