Agreements win silence, hide abuses
In October, AngelList, a company that helps tech startups raise money and hire employees, held an office retreat. In the Hollywood Hills, far from Silicon Valley, the firm’s mostly male staff mingled poolside with bikini-clad women.
Before the afternoon was over, Babak Nivi, a founder and board member at AngelList, said things that made Julie Ruvolo, a contractor, uncomfortable about working at the company. His comments included a suggestion that the women, who were not employees, warm up the pool by jumping in and rubbing their bodies together. The incident was described by two entrepreneurs who were told about it in the weeks after it occurred.
Precisely what occurred at the Hollywood Hills event and the details of the agreement are not publicly known. Several weeks after the party, each side signed a non-disparagement clause as part of a settlement, the two people said. And neither Ruvolo nor AngelList is permitted to talk about what happened that day.
As more harassment allegations come to light, employment lawyers say non-disparagement agreements have helped enable a culture of secrecy. In particular, the tech startup world has
been roiled by accounts of workplace sexual harassment, and non-disparagement clauses have played a significant role in keeping those accusations secret. Harassers move on and harass again. Women have no way of knowing their history. Nor do future employers or business partners.
Non-disparagement clauses are not limited to legal settlements. They are increasingly found in standard employment contracts. Their use has become particularly widespread in Silicon Valley, from venture investment firms and startups to the biggest companies, including Google.
Google declined to comment on its use of non-disparagement agreements.
Non-disparagement clauses have become so common that the Equal Employment Opportunity Commission, which enforces federal discrimination laws, and the National Labor Relations Board, a federal agency that protects workers’ rights, have been studying whether they are having a chilling effect on workers speaking up about wrongdoing or filing lawsuits, said Orly Lobel, a law professor at the University of San Diego.
Employees increasingly “have to give up their constitutional right to speak freely about their experiences if they want to be part of the workforce,” said Nancy E. Smith, a partner at the law firm Smith Mullin. “The silence sends a message: Men’s jobs are more important than women’s lives.”
At Binary Capital, a venture capital firm in San Francisco that collapsed last month under the weight of multiple sexual harassment allegations, new hires signed an employment contract that included the clause that “employee shall not disparage the company,” according to a contract quoted in a lawsuit filed against the firm last month.
Ann Lai, a former employee, said in her lawsuit filed in San Mateo Superior Court in California that she had complained to her bosses about sexism, discrimination and inappropriate behavior in the workplace, and that Binary used the non-disparagement provision in her employment contract to threaten her.
The founders of Binary Capital, Justin Caldbeck and Jonathan Teo, did not respond to a request for comment. Chris Baker, an employment lawyer at the law firm Baker Curtis & Schwartz who represents Lai and has sued Google over broad nondisclosure provisions, declined to comment specifically on Lai’s case.
AngelList grappled with a harassment disclosure after the tech news site TechCrunch reported that AngelList was investigating whether a different partner had sexually harassed someone at a previous job. The company, based in San Francisco, confirmed that it had suspended an employee pending an investigation.
Nivi continued to serve on the company’s board. The non-disparagement clause prevented potential employees and partners from knowing such allegations had been made.
Nivi said by email, “these statements about me are not true.”
Ruvolo says she wants to talk about her situation, but cannot. “I asked AngelList to release me from the agreement, but they have declined,” Ruvolo said. The company did not acknowledge a non-disparagement deal exists.
“I wonder how I may have disserviced other women working in tech, including my female colleagues, with my silence,” she said. “I think we need to rethink what it means to ask for or grant silence as resolution.” AngelList said Nivi has no role at the company and is no longer a board member, but would not say when or why he left the board.
“When we conduct investigations, individuals are removed from the workplace, given counseling if needed, and can’t contact complainants,” Graham Jenkin, AngelList’s chief operating officer, said in a statement. “Any implication that we would silence anyone or not pursue an issue is mistaken.”
Jenkin disputed some of the details of the poolside incident, but would not provide clarification.
Ruvolo, who was a freelance writer for AngelList and whose contract was not renewed this year, said she could not comment on the event that led to her agreement or on the terms of the deal.
“Companies wave the agreements around and use them to force a settlement and make the problem go away,” said Karen Kessler, chief executive of the public relations firm Evergreen Partners. “After that nobody is the wiser for it.”