The Ethereum Foundation lawsuit involving co-founder Vitalik Buterin has brought the organization’s internal management practices under scrutiny after former employee Kayleen Fulton alleged she was fired shortly after disclosing an ovarian cancer diagnosis. Additionally, the dismissal is tied to the workers’ protest against the pledge in the organization’s internal mandate.
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Fulton filed the lawsuit on November 4th at the U.S. District Court in the District of Colorado. In the complaint, Fulton states that she has been discriminated against, retaliated against, and deprived of rights related to the leave due to the health issues. According to the report, Fulton was dismissed on April 6, just 13 days after she had informed the managers about her medical condition.
The lawsuit has six defendants, among whom are the Foundation’s Swiss-based entity, Singapore-based entity, Buterin himself, executive director of the company Bastian Aue, and two human resources companies.
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Ethereum Foundation Lawsuit Centers on Disputed Mandate
The conflict arose in February due to the distribution by the Foundation’s board of a vision statement of the company referred to as the Mandate. The statement provided principles of the company and its responsibility towards Ethereum Foundation lawsuit. However, there were some worries among employees about a certain Source Seppuku License, which included a pledge concerning suicide by sword.
The complaint says that a vote by 79 employees decided to strip the pledge from the Mandate. However, it remained in the final version of the document, which was released on March 13. The pledge was put into a stylized image, whereas, according to the complaint, executive director Bastian Aue informed employees that the pledge was only symbolic.
The conflict escalated as management made employees sign the Mandate. Fulton, along with her colleague Trent Van Epps, wrote a letter to protest against it, as employees could be fired for refusing to sign the document. There were 53 signatures of Foundation employees on that letter.
Fulton revealed that she had ovarian cancer on March 24. One day after that, Fulton and Van Epps posted their letter. As a result of signing this letter, the two organizers were fired on April 6 within approximately 30 minutes of each other without being provided any reason for that.
Cancer Disclosure Raises Disability Discrimination Claims
According to Fulton, the timing of the termination of her services is questionable, and the issue of disability discrimination and retaliation comes up. She asserts that the management did not take proper care of her medical situation nor gave her employment rights before terminating her contract. In addition, she states that she was a hardworking employee who had never been disciplined before.
The Ethereum foundation lawsuit filed by Fulton involves claims on ADA, FMLA, and other federal and state employment laws. Additionally, the termination of Fulton’s employment was driven by the worry of losing her health insurance plan, thus leading to signing a separation agreement.
Later, Fulton opposed the separation agreement stating that she withdrew her acceptance through her legal representation and refunded the money. The Singapore affiliate of The Foundation refuted those claims and stated that the agreement was subject to arbitration in Singapore.
Vitalik Buterin Recorded Conversation Enters Lawsuit
In addition, the Ethereum Foundation lawsuit cites a recorded discussion between Fulton and Buterin. The Ethereum Foundation states in its complaint that the co-founder expressed his worries regarding the possibility of allowing employees to exert their influence in the organization’s decision-making process by provoking disputes either internally or externally.
Buterin allegedly stated in the discussion that providing incentives to employees for raising either public or internal issue may create precedents for other employees to follow the same strategy in influencing the Foundation’s decisions. However, it cannot be proved in the complaint that Buterin personally issued the order to fire Fulton.
Moreover, Fulton filed an employment discrimination claim with the Equal Employment Opportunity Commission (EEOC), which issued notice of right to sue on September 23. At the time of the federal lawsuit being filed, a pending unfair labor practice claim was allegedly pending at the National Labor Relations Board.
Ethereum Foundation Lawsuit Raises Governance Concerns
The matter brings about broader concerns regarding the Foundation’s internal structure and its role in the development of Ethereum Foundation lawsuit. Fulton previously headed Protocol Support and coordinated All Core Developers calls where engineers discussed network upgrades. According to the Ethereum foundation lawsuit, her department was disassembled, and most of the signatories to the employees’ letter quit afterwards.
The Foundation’s November 3 blog post emphasized the open-source nature of the platform and its independence from the control by any particular entity. Applications of Ethereum to Bhutan’s digital identity system and humanitarian aid were provided for extra insight into the Foundation’s commitment to institutional independence.
The lawsuit is filed against the organization following recent changes to the internal structure which have been of interest across the entire Ethereum ecosystem. As per the article in BeInCrypto, ETH experienced an increase of approximately 5% following the release of the last Mandate in March. Afterwards, the asset fell nearly 7% in connection to the June announcement of workforce reduction at the Foundation amounting to approximately 20%.
These price changes cannot prove that Foundation decisions had anything to do with them. Nevertheless, they demonstrate how organizational news may become part of market coverage. The Ethereum foundation lawsuit raises additional legal and governance questions for the organization developing lawsuit.
The next major point would be whether the Colorado court would allow the case to go forward in the USA or it would accept the arguments about arbitration. Until then, the allegations of discrimination and retaliation would stay unsubstantiated, and the defendants would get a chance to refute them through the legal process.
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Bena Ilyas is a Global News Correspondent and Market Analyst at Tronweekly with over four years of experience covering global cryptocurrency, blockchain, and Web3 developments. She has written 1,000+ articles for leading crypto news platforms, reporting on Bitcoin, Ethereum, altcoins, DeFi, and global crypto regulation, alongside Web3 trends, Layer 2 ecosystems, and AI-driven crypto use cases. Her work is based on verified sources and fact-based reporting for global market participants.
