You’ve Got a Problem, Bro – Tinder, Silicon Valley and Resolution 62

by NAVEX Global
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A co-founder and now former employee at Tinder has sued the dating app startup and its leaders for sexual harassment and discrimination. It’s a messy (and familiar) story of an office romance between senior execs gone horribly wrong.  The fallout has only just begun, complete with incriminating texts and emails that have gone viral and will live forever in the company’s cyber culture.

Gender has played a significant role in recent controversies and lawsuits surrounding other Silicon Valley luminaries like GitHub, Snapchat and Kleiner Perkins Caufield & Byers. Each leader or company involved has taken responsibility or refuted charges depending on the circumstances. I encourage you to read Evelyn Rusli’s review of the cases in The Wall Street Journal.

Taken together, there’s a growing consensus that what some call Silicon Valley’s “bro” or “frat” culture is broken and in desperate need of a re-set. The damage inflicted upon female employees aspiring to succeed in the world’s greatest tech hub is obvious.  And opportunities are being missed both to gain and retain strong talent. But the harm is much greater in the bigger picture.  Widespread gender discrimination will undermine product innovation, as well as connecting with and understanding customers. There is a bottom line impact.

But let me call attention to something lurking in the legal weeds that may start to rattle the boy’s club.

A lawsuit here and there is one thing, but a recent California resolution – SCR-62 – may drive bigger changes that will surprise tech leaders, because it aims at the very top of the organization.

SCR-62 pushes California companies to have at least 14 percent or more of their board be composed of women. Most tech companies fall below that threshold, making them vulnerable to both board composition scrutiny and bad press around insufficient female leadership. (Just consider what other high-profile companies have gone through.) Legal liability around harassment and discrimination aside, the negative impact to employee culture and customer engagement when a company is perceived to be sexist far outweighs headline grabbing legal fines and settlements.

According to the University of California Davis’ ongoing study of the subject, software, hardware and semiconductor companies are in the bottom half of California companies in terms of the numbers of women they have on their boards. On average, women occupy only 11 percent of board of director seats at California technology companies. It’s close to 5 percent for semiconductor companies. That’s worse than energy and industrial companies in the state.

And here’s where non-binding resolutions like SCR-62 meet with more clear legal exposure.  If a tech company is hit with a gender discrimination lawsuit (and I anticipate we will see some high profile class actions), lack of compliance with SCR-62 could be used against them. It reflects upon the culture of an organization, and the environment in which women are working.  It may underscore pervasive lack of opportunities for women leaders—up to the very top of the organization—despite access to endless talent pools. It may be hard for a court (and likely, a jury) to believe premier names in the tech industry can’t attract top female talent and leadership. Are women unwilling to help lead them?  It’s an absurd contention.

Not unlike the litany of incriminating texts that are fanning the flames on the Tinder lawsuit, evidence of gender discrimination and a sexist work environment can take on a life of its own, and wreak havoc on a company’s reputation and performance.

Change is coming; it’s only a question of whether tech companies lead it or are led to it.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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