Last Tuesday, California state Senator Hannah-Beth Jackson introduced a bill that will amend the California civil code to tackle an on-going pattern of sexist conduct in Silicon Valley — specifically the sexual harassment in the venture capitalist-entrepreneur context.
The bill is a direct reaction to a story published in June in which two dozen women entrepreneurs spoke to the New York Times about being harassed by venture capitalists. “There is such a massive imbalance of power that women in the industry often end up in distressing situations,” said Susan Wu, an entrepreneur and investor, to the Times.
The bill—SB 224—is the latest in a long chain of events that began with a blogpost by a female Uber engineer in February. Susan Fowler’s damning account of working at the company—meticulously documented and described in the coldest of terms—precipitated an internal investigation into Uber, resulting in the firing of 20 employees. Shortly after, a female data analyst and another female engineer who worked for Uber also came forward with their stories. Among others, these incidents added to the pressure that resulted in founder Travis Kalanick stepping down as CEO.
Meanwhile, what was happening at Uber was echoing across the industry in other companies. In late February, a female engineer sued Tesla for sexual harassment and discrimination—and was later fired in what she claims was retaliation.
Then multiple women came forward, claiming they had been harassed by venture capitalist Justin Caldwell of Binary Capital. The accusations snowballed until Caldbeck resigned, and Binary Capital collapsed when investors pulled their funds.
“Susan [Fowler] inspired us,” Leiti Hsu, an entrepreneur who accused Caldbeck of groping her, told the Los Angeles Times.
With the collapse of Binary Capital, more women came forward to accuse other venture capitalists, like Dave McClure and Chris Sacca.
“[T]he Uber scandal feels different. It feels like a watershed,” Farhad Manjoo wrote in March, speculating that this was the moment that the industry was going to finally take sexism seriously and begin to clean house. Recent legislative action and the emergence of independent whistleblowers suggest Manjoo was right. But why, after decades of inaction, is change finally coming to Silicon Valley now?
Until recently, the government has been largely content to let the tech industry handle its own diversity problems
Until recently, the government has been largely content to let the tech industry handle its own diversity problems. Starting in 2014, big tech companies like Apple, Microsoft, Google, and Facebook began publishing voluntarily diversity reports, vowing to do better. Other companies followed suit. Everyone knew the industry had a sexism problem, yet no specific case merited real repercussions to the companies or individuals involved.
Women who spoke out publicly, like Julie Ann Horvath of GitHub or Amelie Lamont of Squarespace, left or were terminated from employment while their companies’ reputations quickly bounced back. Ellen Pao took her gender discrimination case against VC firm Kleiner Perkins all the way to trial, and lost. In an excerpt of her forthcoming book, she disclosed that the stress of the lawsuit and the accompanying online harassment she received for it, may have contributed to a miscarriage. “I felt, in that moment, that Kleiner had taken everything from me,” she wrote.
There is still a price for speaking out. “I am actually in debt for whistleblowing,” Susan Fowler wrote on Twitter. She added a small parenthetical note that spoke volumes: “worth it.”
Speaking may have cost Fowler financially, but it also began a chain reaction much bigger than the “Pao effect” of lawsuits and disclosures that began after the 2014 Ellen Pao trial. In the wake of the recent disclosures around Caldwell and Binary Capital—disclosures apparently inspired by Fowler’s blogpost—venture capitalists like Reid Hoffman have called for investors to sign a “decency pledge.”
“No matter how well-intentioned, decency pledges won’t cut it,” says Noreen Farrell, the executive director of Equal Rights Advocates, the nonprofit women’s rights organization that is sponsoring SB 224. Farrell says that up until this point, venture capitalists clearly believed that sexual harassment law didn’t apply to them. The venture capitalist-entrepreneur relationship, after all, isn’t a typical workplace relationship. “In many respects it was viewed as a legal free-for-all,” she said.
Of course, that’s not true: California Civil Code 51.9 imposes liability for sexual harassment when there is a “business, service, or professional relationship” between the plaintiff and defendant. Any business, service, or professional relationship will do. But just in case the law isn’t clear enough in certain situations, the statute enumerates several specific types of relationships that aren’t just employer-employee relationships: relationships with teachers, landlords, attorneys, physicians. Jackson’s bill—SB 224—adds venture capitalists to that list.
“Now while I do believe discrimination is already outlawed under California law, the unique nature of the investor-entrepreneur relationship is one that could stand additional clarity in order to provide certainty so that women know that they have the support of the law behind them,” said Senator Jackson in a press call announcing the bill.
Silicon Valley is finally being forced to reckon with its endemic sexism
In addition to state legislators looking head-on at pervasive discrimination inside the tech industry, several high-profile lawsuits remain pending in the courts: AJ Vandermeyden’s case against Tesla, Elizabeth Scott’s sexual harassment case against UploadVR, and Tina Huang’s class action lawsuit against Twitter.
In announcing her bill, Senator Jackson made passing references to both an incendiary internal memo at Google in which an engineer opined that women may be less suited to computer programming due to biological reasons and to the scandals around Uber as indicators of a culture in need of change. Jackson praised the women who spoke to the Times as “peeling back a shroud of secrecy,” and suggested that the stories that had been reported were merely “the tip of the iceberg.”
All of which adds up to a sense that finally, for the first time, Silicon Valley is finally being forced to reckon with its endemic sexism.
“For reasons I can’t figure out, more women are coming forward, even if they don’t litigate,” says Joan C. Williams, a law professor at UC Hastings whose scholarship has focused on women in the workplace, particularly in the technology industry. “Just to have women being public about the kinds of things that are happening to them—and I’m thinking here about Uber and having other women come forward as well… it can be powerful. Things like sexual harassment survive in the dark, and in a culture where people are apprehensive to say anything for fear.”
“It’s not as if that’s changed, so I’m trying to figure out why all these women are coming forward now,” Williams added.
Farrell says that historically two factors have dampened sexual harassment litigation in tech: job mobility and arbitration clauses. Many women in the tech industry have reached out to Equal Rights Advocates through their helpline, only to conclude that they’d rather “move on” than file a lawsuit. But that seems to be changing, says Farrell. For whatever reason, she says, “women are realizing that going to the next company doesn’t mean that they won’t suffer from sexual harassment.”
“I’m trying to figure out why all these women are coming forward now.”
Pervasive arbitration clauses in employment agreements that force sexual harassment victims to settle complaints quietly out of court instead of engaging in a legal battle also pose a barrier. And nondisparagement clauses, which prevent former employees from speaking against their former employers, are fairly standard in the tech industry. The proliferation of nondisparagement agreements silences complaints and generates a chilling effect across the industry—a problem noted by both Susan Fowler and Ellen Pao.
And yet despite the hurdles the chill has lifted in 2017, and stories of harassment continue to trickle out—stories that have forced industry figureheads call for decency pledges and state legislatures to propose bills. SB 224 is due to be introduced in January, when the California senate’s new session begins.
At the federal level, agencies like the Equal Employment Opportunity Commission, National Labor Relations Board, and even the Securities and Exchange Commission have already been placing greater scrutiny on non-disparagement agreements—although how this will change under the Trump administration remains to be seen.
Meanwhile, Fowler has filed an amicus brief in a consolidated set of three labor law cases before the Supreme Court (captioned Epic Systems v. Lewis) that challenges the power of companies to force workers into arbitration. The question before the court is whether class action waivers in arbitration agreements—which surrender a worker’s right to bring or be included in a class action lawsuit—are lawful.
Fowler, like other Uber employees, signed a class action waiver as a condition of employment. Her brief—written by her lawyer, Curtis Baker—implies that workplace protections have broken down so much that workers can only resort to disruptive acts of whistleblowing. “But for Ms. Fowler’s perhaps naïve courage in publishing her post – for which she faced an attempted smear campaign and a surreptitious investigation into her friends and family – Uber’s workplace would have remained exactly the same.”
Aside from the reference to Fowler’s “naive courage,” her lawyer doesn’t provide much insight into why Fowler blew the whistle. The intent is maybe beside the point. The snowball effect from Fowler’s blogpost continues, toppling CEOs and venture capital firms, launching legislation—whistleblowers inspiring more whistleblowers, each successive disruption forcing change on an industry that, despite all its talk about moving fast and breaking things, has resisted change thus far.