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This company's workers give new meaning to office romance

If workers at Silicon Valley startup Zenefits are troubled by a bout of bad press and the departure of the company's founder and CEO, they will no longer be allowed to commiserate over drinks -- at least not at work.

"Although it is very common for startups in Silicon Valley to permit and stock these beverages (including at my previous startup Yammer), I believe it's time for a different policy," Zenefits' new CEO David Sacks wrote last week in an email with the subject line, "Office Alcohol Policy."

"After work, on their own time, employees are free to drink, and there are any number of local establishments where they can do this. Our office is just not one of them," Sacks added.

The ban on alcohol comes after the company's director of real estate and workplace services reportedly in June urged workers at Zenefits' San Francisco headquarters to refrain from having sex in the stairwells of the building, saying its management had complained after finding cups of beer, cigarettes and condoms.

Zenefits on Feb. 8 said its founder, Parker Conrad, had stepped down as CEO and a company director, with David Sacks named as his successor.

Sacks, formerly Zenefits' chief operating officer, declined to be interviewed. However, in a blog posted on the company's website, Sacks acknowledged problems at the company and said they led to Conrad's exit: "Many of our internal processes, controls and actions around compliance have been inadequate, and some decisions have just been plain wrong. As a result, Parker has resigned."

But the shakeup at the top did not derail a regulatory probe, with the human-resources startup once valued at $4.5 billion under investigation by the California Department of Insurance, which earlier this month said it began looking into the company's business practices last year.

While calling Conrad's resignation "an important development," Dave Jones, California's insurance commissioner, said it did not resolve his department's investigation of the company's business practices and its compliance with the state's law and regulations.

In fact, Jones said he had ordered additional investigative resources be deployed to the probe of the company, saying under the state's consumer laws, "only individuals and firms with the expertise and integrity to transact insurance are allowed to do so."

"Zenefits is now focused on developing business practices that will ensure compliance with all regulatory requirements, and making certain that the company operates with integrity as its number-one value," Kenneth Baer, a Zenefits spokesperson, said in an email.

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