Former Theranos employees claim toxic work culture: Part 3

Some employees say CEO Elizabeth Holmes didn't want to hear criticism or too many questions. "Not a lot of camaraderie. A lot of paranoia," said Justin Maxwell, Theranos' former design director.
7:33 | 03/16/19

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Transcript for Former Theranos employees claim toxic work culture: Part 3
So where are we right now? We're at coupa cafe in Palo alto. This is where you would meet Elizabeth. This is where we met Elizabeth. Coupa cafe, a bustling eatery in downtown Palo alto. Just a small black coffee please. This was the hot spot, where the heavy hitters of tech were known to make business happen and Elizabeth Holmes wanted in on this elite club. Eagle-eyed viewers of the social network might even spot mark Zuckerberg's character with his coupa cafe cup in this scene. I'm not a bad guy. Somewhere over there there's a 40 million dollar check being cut, I'm just kidding. That's yours right? Reporter: By 2006, Elizabeth's obsession with Steve jobs was in full swing. She had already recruited his former right hand man, Avie tevanian, and iPhone product designer Ana Arriola -- and now was continuing to poach aggressively from apple and silicon valley's ranks. That requisite green juice never out of grasp. I had just gone in there with this expectation that I was meeting brilliance, the next Steve jobs, next Zuckerberg. She's incredibly passionate. Her passion was pretty intense, pretty compelling. Very expressive with her hands. She has a lot of conviction in her vision. You know we're changing the world. We have the technology to do it. Reporter: They all eagerly jumped on board. It was the opportunity to join the rocket ship. And just like her intensity is a little overwhelming. I think, in retrospect look at intensity in different light but at the time, yeah, it was great. Reporter: Almost as soon as they started, they say, life at theranos was just a little bit off. How would you describe the culture at theranos? Not a lot of camaraderie. A lot of paranoia. The office environment was designed to not really interact with anybody else. She believed in multiple levels of secrecy and compartmentalization. Reporter: Employees say Elizabeth's style was off for Justin, what began as excessive micro-managing turned into -- Actually noticing that this person is willing to lie to me about extremely trivial unimportant things. Reporter: Silly things like saying she left the office for the day. And she was actually just in an office right down the hall from me. You could see her sending that email. So I walked over to her and had a bit of an argument with her and she stormed after me and said don't you ever walk off on me again. You know like if you watch "The office" there was a lot of like looking at the camera in disbelief and that was all day. We were all just looking just like what is going on. You got a sense that not everyone in the company at that time really knew what was happening from a holistic picture. That was partly through an intentional effort. Reporter: Adam says the departments were purposely kept separate, designed so no one could catch on that the technology didn't actually work. We're expecting people to prick their fingers which is hard and scary and put it into the device and it turned out if you screwed up the introduction of the blood into this cartridge it was like game over. Wouldn't work? It would be inaccurate. You would get a wildly wrong result. How quickly is it before you start to notice problems? Nine months into it. I was starting to get a little bit frustrated that we would see demos and they just wouldn't work. But some of that you expect to get from a startup that has a product that's not done, right? But the problem was it never got any better. I think what she didn't expect was that I would ask a lot of questions and that I would ask tough questions. She did not want to hear other people's opinions. Reporter: Elizabeth reacted swiftly and harshly, eliminating those who raised doubts. There were posts from employees. They equated it to a south American dictatorship or a drug cartel. They assembled some of the best people that they could possibly get and they just vanished. I was one of the few people that stood up to her. I have told her no numerous occasions. Reporter: In August 2007, Ana found out about a research study that was testing theranos technology on terminal cancer patients. There were patients who were third and fourth stage oncology cancer patients that had given their blood to test this device. The light was seeping in and corrupting the blood assays and so the data was faulty. Reporter: The test results wouldn't be used to impact the actual treatments given to patients. But employees hated doing research on such vulnerable people. I brought this to Elizabeth and she gave me an ultimatum. Suppress it and continue on business as usual and I was like that's unacceptable. And I decided to resign. I just literally had nothing I wanted to do with that company anymore. Reporter: Ana wasn't alone. Justin sent Elizabeth two management books with titles not safe for broadcast. I can't say any of those on ABC news. Reporter: And a pretty epic letter of resignation. Hi I'm resigning. Lying is a disgusting habit and it flows through conversations here like it's our own currency. The cultural disease is what we should be curing. But I really truly believe you know it already. And for some reason I can't figure out why you allow it to continue. Justin Maxwell. Reporter: Avie, perhaps her biggest recruit, was at his breaking point too and expressed his concerns to another board member. I said I'm going to give you a choice. I think that there is a chance this company can make this product work. I would love to stick around with you and we probably need to revisit Elizabeth's role or if you want I resign. He said Elizabeth wants you to resign. He said you ask too many questions. Were you surprised she wanted you to resign? She had already poisoned the well. I would never expect anyone would behave the way that she behaved as a CEO. And believe me I worked for Steve jobs. I saw some crazy things but Elizabeth took it to a level I'd never seen before. Reporter: While on the inside, there may have been turmoil, on the outside, people were fawning all over Elizabeth and her idea. Are we crazy now that all these people are making a big deal out of it? Maybe we're crazy? Reporter: She was becoming a full-fledged star. Ladies and gentlemen please welcome the only person I know who makes me feel like a lazy

This transcript has been automatically generated and may not be 100% accurate.

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