TECH’S LACK OF TRANSPARENCY AROUND HARASSMENT IS DANGEROUS

Mike Cagney, co-founder and chief executive of Social Finance Inc. (SoFi)

IN AUGUST, WHEN a former employee sued online-lending platform SoFi for firing him after he reported incidents of harassment, the company quickly rejected his claims. The matter had already been investigated internally and no wrongdoing was found, SoFi said. Unlike the many other accusations of harassment and bad behavior brought to light in Silicon Valley this year, nobody resigned. SoFi had made it clear: The $4.3 billion-valuation company planned to defend itself. It would stand by its chief executive, whose name was added to the suit.

Late on Monday, that CEO, Mike Cagney, said he would resign at the end of the year. “The combination of HR-related litigation and negative press have become a distraction from the company’s core mission,” he wrote in an email to employees.

By resigning through a press release, Cagney did not address whether any of the allegations are true. Did he “empower other managers to engage in sexual conduct in the workplace,” as the lawsuit alleges? Did the company deny its employees things like breaks, minimum wage, and overtime, as alleged by a second lawsuit from five former employees? And what of Cagney’s reported romantic relationships with two employees described in the New York Times?

SoFi continues to deny the claims in the first lawsuit, with plans to “vigorously defend ourselves,” a spokesperson said in a statement. And the company plans to respond to the second lawsuit in court. SoFi will not discuss whether it will reveal the results of any internal investigations. So for now, Cagney’s resignation is akin to resigning to spend more time with one’s family.

At least four technology executives and investors have been forced out of their jobs this year after accusations of sexual harassment were made public. At least three other independent investors—with no boss or investors to hold them accountable—have issued public apologies. Behind the scenes, some firms have hired crisis-management PR firms to defend against potential allegations. Other investors and executives are having what one female entrepreneur called “‘We cool?’ conversations” with women they may have previously made uncomfortable.

It is no longer safe to say sexual harassment and discrimination are limited to a few “rotten apple” bad actors in Silicon Valley, or that exposing them will solve the problem. The tech industry’s problems with women are widespread.

In SoFi’s case, the lack of transparency allows Cagney to exit without admitting to any wrongdoing. In some cases, though, it’s the opposite: We don’t know what happened, so we assume the worst.

Either way, the lack of transparency is dangerous. As entrepreneur Cheryl Yeoh notes on her blog, all bad behavior now is lumped into “one big black box of inappropriateness.” But inappropriate conduct can range from a relationship with a subordinate to criminal acts like sexual assault. When all manner of inappropriate behavior is alleged but not specified, every incident gets the same punishment: The accused is publicly shamed and fired. Since the only seemingly effective way to report an instance of harassment means going nuclear, minor incidents go unreported, and the perpetrators continue harassing. When they’re finally called out, they’re often confused about what they did wrong.

That’s how Justin Caldbeck, a venture capitalist accused of harassment by six female entrepreneurs, feels justified in sending a cease and desist letter to one of his accusers, entrepreneur Niniane Wang. In it, Caldbeck’s lawyer gives a cursory nod to Caldbeck’s “deep regret over making you feel uncomfortable,” while disputing “a number of the specific allegations that have been made against him.” The letter then demands Wang stop telling certain stories and reserves the right to sue. Or how investor and entrepreneur Marc Canter, accused of harassment by entrepreneur Wendy Dent, can excuse his actions by saying, “he disliked her ideas so he behaved the way he did to make her go away,” according to the New York Times. (Canter later apologized for “using a sexual innuendo to end our relationship”.)

Or how fans of former 500 Startups CEO Dave McClure can chime in with support for his actions after he admitted to being “a creep” with some women in professional settings, arguing on his behalf that hey, he was just being a man.

Yeoh suggests that adopting clearly defined levels of “inappropriateness” would give women a framework to report incidents of all degrees. They give HR departments a framework through which to respond and hopefully prevent more serious ones. And they give us a framework through which to understand the incidents. Companies should do the same when disclosing the results of internal investigations and removing executives.

[“Source-wired”]