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Bias Claims Surge Against Tech IndustryVivek Wadhwa, a tech entrepreneur-turned-academic, is a critic of Silicon Valley employment practices he sees as excluding women, minorities and older workers.
2013-08-16 05:42:40 PM
SAN FRANCISCO — Vivek Wadhwa wears many hats in Silicon Valley. He is a fellow at Stanford Law. He's founded two software companies. And he's a VP at Singularity University on NASA's research campus, which brings together innovators, scientists and philanthropists to collaborate on world problems.
He's also the Valley's critic-in-chief when it comes to the lack of diversity.
As a board member of one Valley company, "I noticed that they had all males on their development team," he recounted. So Wadhwa, an Indian-born U.S. citizen in his 50s who has written extensively on bias in the hiring practices at tech firms, threatened to quit if they didn't bring on women and minorities.
"It's the dark secret," he said. "There's a problem with age discrimination, sex discrimination. And there's a problem with blacks and Latinos being left out."
"I'm a big cheerleader of Silicon Valley," Wadhwa added. "But there's a problem here."
Employment suits are up in Silicon Valley — and discrimination cases are the fastest-growing slice. Last year, the region got a wake-up call when VC firm Kleiner Perkins Caufield & Byers was slapped with a sex discrimination suit that shined an unflattering light on the Valley's employment practices. And Sheryl Sandberg's bestseller "Lean In" has reportedly inspired a wave of demand letters from female tech employees.
Plaintiffs lawyers say they see the industry's lack of diversity as fertile ground for litigation, especially against younger companies where rookie execs may ride roughshod over employment laws in their rush from start-up to industry behemoth.
"We've seen these tech companies play fast and loose with the rules," said Gary Gwilliam of Oakland-based plaintiffs firm Gwilliam Ivary Chiosso Cavalli & Brewer. "I think a lot of these companies don't have good human resource practices …They haven't crossed their t's and dotted their i's."
Defense attorneys take a softer view, insisting self-selection among job candidates, not bias, is the principal explanation for relatively low numbers of women and older workers in the labor force at technology companies.
Rising employment litigation against tech firms doesn't necessarily indicate illegal behavior, argued Kim Stone, president of the Civil Justice Association of California, or CJAC — a tort-reform group founded, in part, by a group of Silicon Valley tech and venture capital executives.
"My hunch is that lawyers are like gas," said Stone. "They expand to fill the space. When there's a growing business, there's going to be a number of lawyers filing lawsuits."
Employment suits against tech firms roughly doubled in California between 2000 and 2012, according to data collected by a Thomson Reuters litigation monitoring service. That mirrors an overall surge in employment suits across the private sector.
But during that period, the growth in employment complaints premised on discrimination outpaced other types of claims and now makes up the largest category of employment suits against tech companies.
San Francisco employment lawyer Alan Exelrod, who represents Ellen Pao in her 2012 sexual harassment and sexual discrimination suit against former employer Kleiner Perkins, says gender discrimination is at the forefront of litigation exposure for technology companies.
"Sex discrimination is the bigger problem," said Exelrod, a partner at Rudy, Exelrod, Zieff & Lowe, adding that he's seeing more claims for state and federal maternity and disability leave.
Since Pao's suit, female employees at other Valley venture capital firms — Pantheon Ventures and CMEA Capital — filed their own suits alleging sex discrimination.
More recently, Facebook exec Sheryl Sandberg's bestselling book, "Lean In: Women, Work, and the Will to Lead," has already been credited with spurring demand letters from female tech workers who allege they were unfairly denied promotions.
"Despite the tremendous success of a few women in tech, the sad truth is that it is an industry plagued by gender stereotyping and bias," said Kelly Dermody, a partner at Lieff Cabraser Heimann & Bernstein. "It may be a relatively new and undeniably innovative sector, but it has remained remarkably traditional in terms of maintaining an old-style gender glass ceiling and in underpaying women."
While tech sector employment records are hard to come by, publicly available data points to a gender gap. In 2012, female software developers comprised only 20 percent of their occupation and made 18 percent less than their male counterparts, according to an analysis of Bureau of Labor Statistics data by the Institute for Women's Policy Research.
Dermody chairs the employment practice group at Lieff Cabraser, which has brought large class actions against some of the region's tech titans. In January, the San Francisco-based firm filed a class action against Hewlett-Packard Co. over allegations that the company misclassified thousands of its technical workers to avoid paying overtime wages.
And if a federal judge in San Jose certifies the 60,000-member class of workers once employed by Apple, Intel, Google and other Silicon Valley firms in a case targeting so-called "no-poach" agreements, Dermody could represent one of the largest classes of employees to ever sue the tech industry.
Dermody has praised Sandberg's book, saying it offered tech companies a teachable moment to increase diversity and business advancement for women in the workplace. But she's not expecting the industry to change course on sex discrimination.
"I have no reason to believe the problem will be resolved any time soon," she said.
But Sedgwick partner James Brown says the stereotype of an industry rife with sex discrimination is overblown.
"I haven't seen that gender imbalance," said Brown, who co-chairs Sedgwick's employment and labor law group. "I just don't see it as a heightened risk."
Brown said he sees more traditional employment issues like employees mislabeled as independent contractors, workers wrongly classified as exempt, and unenforceable non-compete contracts as more pressing employment problems for tech companies than sex and racial or ethnic discrimination. That's particularly true at startups, he said, which "don't want to spend the money" on employment law counsel.
Brown takes a different view of age bias in the technology industry. There, he concedes, the industry faces "heightened risk." In 2010, the California Supreme Court reversed summary judgment on Google's behalf in a case filed by 54-year-old employee Brian Reid who alleged that he was fired due to age bias. As evidence of discrimination, Reid said a supervisor and other employees often made derogatory age-related comments, calling him an "old man" and an "old fuddy-duddy." While a lower court called those comments insufficient grounds for proving a company's actual bias, the Supreme Court disagreed, finding that those "stray remarks", though uttered by non-decision making employees, could be evidence of discrimination. The case later settled for an undisclosed amount.
"The takeaway from Reid v. Google is watch the remarks at work and how you treat people over 40," said Charles Louderback of the Louderback Group. "You have to be careful how you treat those workers."
The San Francisco attorney, who represents parties on both sides of employment litigation, said the industry is "ripe for age discrimination cases" and Reid will likely make it harder for companies to get those claims dismissed. Moreover, the holding could carry over into other types of discrimination cases, he said.
But to Orrick's Joe Liburt, whose Valley clients include Apple Inc., Reid is less sweeping.
"Even if the plaintiff submits evidence of a remark by a non-decision maker, the employee still has to show that the remark influenced whatever decision the plaintiff is challenging," said Liburt. Plaintiffs must also show that decision makers acted with discriminatory intent, he said.
Recent Supreme Court decisions, including Wal-Mart v. Dukes, favor employers and make employment class actions more expensive for plaintiffs, Liburt said.
One plaintiffs lawyer concedes the point, estimating the outlay from complaint to class certification has swollen from about $500,000 to more than seven figures. But plaintiffs attorneys also say the greater cost is a negligible consideration for big firms with the resources for playing the long game.
Liburt insists any under-representation of women and older workers points to a highly specialized and self-selecting labor pool, not discrimination.
There's data to back him up. Although 57 percent of those receiving undergraduate degrees in 2010 were female, women made up only 18 percent of computer and information science degrees that year, states a report by the National Center for Women and Information Technology. The center also reports that the number of first-year undergraduate women interested in computer science fell by 79 percent between 2000 and 2011.
But if the industry has nothing to hide, asks Wadhwa, why won't it share its statistics?
"I want companies to disclose the data publicly," he said. "They should be disclosing gender stats on how many applications they've received and how many they hired."
Wadhwa, 56, said he didn't have to resign from the board of the tech start-up as he threatened earlier this year. The company has since hired "a couple women, but they're not software developers," he said. "They've complained they don't have enough female applicants."
Wadhwa's response: "I told them to find them."
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