Firm’s exec sued over harassment
A former employee has sued Binary Capital, accusing the San Francisco venture capital firm of harassing and defaming her after she resigned. Her suit follows recent revelations that co-founder Justin Caldbeck made unwelcome sexual advances toward female startup founders.
Ann Lai, who was a principal at Binary until May 2016, said in a lawsuit filed in San Mateo County Superior Court that Caldbeck had texted her repeatedly after she left the firm, threatening her not to dis-
parage or divulge information about the company. Binary’s employment agreement contains illegal provisions regarding confidentiality and non-disparagement, according to the suit.
Caldbeck resigned from Binary on Sunday after a report by the Information detailing his sexual advances toward women looking to raise money. His partner Jonathan Teo has told investors he’s willing to step down from the firm. The imbroglio underscores the persistence of harassment and gender inequality in Silicon Valley, which came into wider light with Ellen Pao’s gender discrimination suit against Kleiner Perkins Caufield & Byers in 2012.
“Binary discriminated against Lai because she disclosed, or because Binary believed she had disclosed, information about her working conditions after her employment with Binary had ended,” according to the complaint filed Wednesday. “This discrimination took the form of discouraging others from hiring her, threatening her with litigation, threatening to ruin her career, and sending her harassing and threatening texts for the purpose of discouraging her from engaging in conduct protected by law.”
A representative for Binary couldn’t be reached for comment. Lai’s attorney Chris Baker declined to comment.
Lai left Binary because of its “sexist and sexual environment,” including inappropriate conduct with female staff at company outings, a female specific dress code and statements about the attractiveness of Lai and other women such as female startup founders, according to the lawsuit. Lai, who said she complained about this misconduct, said Caldbeck began pressuring her after she left to keep her from talking about her experience there.
“I’m not going to warn you again,” Caldbeck wrote to Lai on the messaging application Confide, according to the suit. “Please stop and don’t add ill will. It didn’t work out. I have egg on my face for supporting you and I’m sure you are disappointed w your experience but don’t put us in a situation where we need to be more aggressive.”
Binary Capital also threatened to withhold Lai’s carry, or share of profits from investments, as part of its push to keep her quiet, according to the lawsuit. Lai said she notified California’s Labor & Workforce Development Agency of Binary’s employment agreement, saying that it held illegal provisions that prevent employees from ever disclosing information about their working conditions. The prohibitions in turn “allows employers to abuse their power and mistreat their workforce” and “leverage their positions of power for sexual gain and for other inappropriate reasons,” according to the complaint.
Lai, who said Binary’s actions caused economic and emotional harm, is seeking civil penalties, attorneys’ fees and costs, economic and general damages, according to the lawsuit. No specific amount was given.