The issue of sex discrimination and sexual harassment in the technology industry has received a considerable amount of attention recently, in part due to several high-profile lawsuits, but also simply because more people are speaking out about it. Much of the attention has focused on California’s Silicon Valley and its particular culture of venture capitalists (VCs) and entrepreneurs, but similar concerns can be found in New York City and elsewhere. Most sexual harassment claims involve unlawful action by a supervisor or manager, or an employer’s failure to prevent harassment by a complainant’s fellow employees. Today’s tech industry presents a difficult question: do employment statutes protect startup founders from sexual harassment by investors and other individuals involved in startup culture? Very little guidance is available from case law, but existing employment laws and regulations may give us some ideas.
A female tech entrepreneur recently spoke out about sexual harassment in the tech industry’s startup culture. She stated that she attended an event hosted by Y Combinator, a seed fund that supports tech startups, to promote a business she founded with another entrepreneur. Part of the purpose of these events is to allow founders to promote their businesses to VCs and other investors. No direct employment relationship exists between investors and founders at these events, but the power dynamic between the two seems clear. Even when discussing the issue anonymously, few, if any, women have been willing to name VCs who have sexually harassed them.
The entrepreneur described an encounter with a VC who expressed interest in investing in her company. She states that he “suggested they go out for drinks” when they were both back in New York City, and then he put his arm around her. His hand went somewhere inappropriate, and she claims that he left it there long enough that it did not seem like an honest mistake. In an office setting, this would seem to be a clear-cut instance of sexual harassment, but it is not clear that it meets the legal definition in this situation. She states that the VC offered to invest $50,000 in her business, but the offer came with the suggestion that they “keep meeting up in New York.” She turned down the money.
The recent lawsuits alleging sexual harassment in the tech industry have mostly involved employees claiming unlawful acts by supervisors and managers. In one prominent lawsuit, three executive assistants at a VC firm alleged that the firm’s chief operating partner subjected them to ongoing sexual advances and remarks, and the firm failed to address their complaints. The parties settled the case in September 2014.
Federal law defines sexual harassment as conduct by a supervisor or manager towards an employee that expressly affects their employment or creates a hostile work environment, or conduct between employees that the employer fails to address when notified. 29 C.F.R. §§ 1604.11(a), (d). The work relationship between an investor and a startup founder might not easily fit into this regulatory scheme, unless perhaps the investor has taken on some sort of managerial or supervisory role within the company. Meanwhile, various organizations have begun to address the issue on their own. Y Combinator, for example, announced a “zero tolerance” policy for sexual harassment by investors towards founders.
Phillips & Associates’ sexual harassment lawyers advocate for employees and job seekers in the greater New York City area, asserting claims for violations of federal, state, and municipal employment laws. To schedule a free and confidential consultation to see how we can help you, contact us today online or at (212) 248-7431.
More Blog Posts:
Plaintiff in New York Lawsuit Alleges Former Employer Retaliated Against Him for Reporting Workplace Sexual Harassment, New York Employment Attorney Blog, June 12, 2015
Sexual Harassment Complaint Against New York Limousine Company Results in Judgment for Plaintiff of Over $720,000, New York Employment Attorney Blog, May 15, 2015
New Harvard University Policy Demonstrates a Different Side of Sexual Harassment Law, New York Employment Attorney Blog, April 8, 2015