Women In Silicon Valley: Corporate America’s Gender Paradox

What Françoise Brougher’s U.S. $22.5 million gender discrimination settlement from Pinterest tells HR

On December 14, 2020, Pinterest, an image sharing and social media platform, coughed up a whopping US $22.5 million to settle a gender discrimination lawsuit.  

This settlement, touted to be the largest publicized settlement for a gender discrimination case, ever, was brought by Françoise Brougher, the company's former chief operating officer.
 

The Pinterest vs. Françoise Brougher suit is notable on several fronts - the size and public nature of the settlement, the fact that there aren’t many C-level female executives who went against NDA to go on record about gender and pay discrimination at the workplace, and that Pinterest did not fight back the allegations (although it did not admit to any liability either), unlike what happened in the Kleiner Perkins Caufield & Byers case in 2012. Will this be a turning point in addressing gender disparity in the tech industry?

Gender discrimination is not new to Silicon Valley. The industry has been perceived as sexist since the early days.

Time and again, and irrespective of whether you are a startup or a tech giant, we have come across cases of rampant discrimination and bias against senior-level female executives in the industry. Companies such as Google, Tesla, Facebook, Uber, UploadVR, Apple, etc. have all come under the radar on account of gender discrimination.
 

"Unfortunately, gender discrimination lawsuits in Silicon Valley and in the high tech industry are common and have been increasing since the 2012 Pao v. Kleiner Perkins lawsuit," says Helen McFarland, Labour and Employment Attorney, Seattle, Seyfarth Shaw.

The American tech industry is still a ‘boys only’ club, predominantly led by male executives. The number of women running Fortune 500 companies hit a record high of 37 in 2020, according to the Fortune 500 list. However, even with 37 female CEOs, women make up just 7.4% of the leaders on the list!
 

"Tech industry remains male-dominated. As more gender discrimination lawsuits come up, it does give a sense that the issue may be more widespread than what we originally perceived," notes Vikram Shroff, Head, HR Laws (Employment & Labor) at Nishith Desai Associates.

Françoise, in her blog post titled The Pinterest Paradox: Cupcakes and Toxicity, wrote extensively about “the rampant discrimination, hostile work environment, and misogyny that permeates Pinterest.”

Françoise notes that although 70% of Pinterest’s users are women, "the company is steered by men with little input from female executives. Pinterest’s female executives, even at the highest levels, are marginalized, excluded, and silenced. I know because until my firing in April, I was Pinterest’s chief operating officer."
 

 

“The laws surrounding gender discrimination and harassment continue to evolve and grow worldwide. But it is not enough - there also needs to be more active recognition of the issues and buy-in from the management. Companies need to have a zero-tolerance mindset on such issues, irrespective of whether it involves a junior-level employee or the CEO / founder. Having the right culture, policies, training and messaging can help go a long way in being able to stop gender discrimination at workplace and hopefully nip it in the bud,” adds Vikram.

Françoise, 55, who worked at Pinterest from March 2018 was fired in April 2020 by Pinterest’s CEO Ben Silbermann, over a ‘10-minute video call’. She accused the company’s CEO of having an “in group,” and added that men were invited to “meeting after the meeting,” and held all the power and influence.
 

“Companies should ensure that business decisions are made with the full input of their executive teams rather than a small cadre of an executive leader’s close (frequently male) confidants, as was the case at Pinterest. This will ensure that female executives’ voices are heard, which will go a long way toward retaining women at the executive level,” notes Jessica Westerman, Attorney, Katz, Marshall & Banks.

In June, 2020, Pinterest's two other staff members, Ifeoma Ozoma and Aerica Shimizu Banks, resigned alleging racism and discriminatory treatment. Following the allegations, over 200 Pinterest staff organized a ‘virtual walkout’ extending support to their female counterparts and in protest of the company’s policies.

“While the discrimination laws have been in place since the early 1960s, social movements such as #metoo have encouraged women to be more vocal about unfair treatment and state legislatures have been modifying existing employment laws to offer additional protection to employees regarding unfair pay and discrimination. Companies should recognize that there is widespread community support for diversity, inclusion and equity (DI&E) initiatives and that there are serious consequences (both financial and reputational) for failing to include women and people of color,” adds Seyfarth’s Helen.

The Pinterest settlement is also notable for the provision requiring $2.5 million ‘to be used towards advancing women and underrepresented communities in the tech industry’.

"Employers are closing tracking these international developments. As the stakes get larger, there will continue to be a more active effort towards redefining and hopefully strengthening an organization’s culture and policies," adds Vikram.
 

"The size and very public nature of the settlement is likely to make businesses pay attention to the seriousness of claims for discrimination and retaliation, and the need for ongoing training efforts. We have seen steady increases in the number of retaliation complaints over the past few years, and that does not look like it is abating any time soon," says Helen Holden, HR Advisor, Employer Lawyer and Litigator at Spencer Fane.

Françoise notes in her blog post that in April 2019, when Pinterest held its initial stock offering, she 'felt something changed'. She was no longer invited to board meetings and 'no one told her why'.

“The record-breaking amount of the settlement communicates the seriousness of subtler forms of gender discrimination, such as pay discrimination, no matter how high up the corporate ladder. Hopefully, this development will persuade employers to take pay discrimination claims more seriously,” notes Jessica. 

Françoise says that with S1 filing, she found that she 'was the only executive on the leadership team given this backloaded deal.' "In my first year, I vested 37 percent of what my closest peer, Chief Financial Officer Todd Morgenfeld, vested in his first year. I would catch up to him eventually, but only if I was not fired first."

“On the gender discrimination front, companies should audit their existing payrolls and identify instances of pay discrimination across their organizations, then take steps to remedy them.  They should also practice pay transparency to promote equal pay for equal work from day one.  On the retaliation front, they should implement protections for employees who raise concerns about discrimination in the workplace so that employees are not afraid to speak out about discriminatory treatment,” adds Jessica.

Ever since Françoise's lawsuit against the company in August 2020, a number of Pinterest employees have come forward complaining about the company’s culture.

Law firm WilmerHale, which conducted a five-month investigation into Pinterest's company culture, came up with a set of recommendations to change how the firm handles workplace conflicts, including harassment and retaliation.

It specifically recommended the creation of an internal ombudsman’s office that can field employee complaints. Pinterest has committed to adopting the recommendations.

There has been a lot of discussion around diversity, inclusion and equity. The foremost question is usually 'who drives an inclusive culture?' 
 

"An inclusive culture begins with the CEO of the company. The most successful inclusive companies are driven by CEOs. If you look at the highest performing companies in the industry they are all very diverse. I worked at IBM in the 1980s. It is a very inclusive company. It's a hard company to work in and they have got their issues, but they have been around a long time. There aren't many tech companies that have lasted as long as IBM," says Josh Bersin, Co-Founder and Dean, The Josh Bersin Academy.

Even after five years since the Silicon Valley tech giants Apple, Facebook, Google, and Microsoft first released their diversity reports, they have only made little progress. While the search engine giant has only 33% female workforce, the social media giant’s technical workforce was only 23% female in 2020.
 

Ray Narine, Head of Talent Development, Deputy Chief Diversity Officer, at Consumer Reports, says that there is no second thought on senior leadership's responsibility and accountability when it comes to DE&I's success.

“It definitely starts with the senior leadership and the CEO. When Marta L. Tellado, President and CEO of Consumer Reports, started in 2014, the company's board of directors was more homogenous. Marta, who comes from a Latina origin, could successfully diversify the board. So, the culture needs to trickle down from the top and spread throughout the organization. Leadership needs to show how important it is to the company," Ray adds. 

Diversity, inclusion and equity initiatives are slowly but surely becoming a core and integral part of several leading organizations. It is common to see these topics at the top of the agenda for management. In fact, there has also been a trend for the board members to actively push the agenda among the stakeholders.
 

Mark Arell, Vice President, Talent and Organizational Development, Herc Rentals also notes that there is no substitute for the CEOs commitment to driving performance and an inclusive culture.

“The culture of the company is important to drive performance. Diversity and inclusion are not separate topics for us. It is part of our business strategy. It is a part of who we are and what we are striving for. And it's all focused on driving performance and making us a better place to work." notes Mark.
 

Although the number of women taking Science, Technology, Engineering and Mathematics (STEM) subjects has increased globally, we still have a long way to go when it comes to gender parity in the workplace. There is a lot to be done on the hiring and retention front too. Women still account for only 12% of professionals in cloud computing, 15% in engineering, and 26% in data and AI.

How can HR help in building an inclusive culture and prevent discrimination and retaliation.

“HR has the most crucial role in preventing discrimination as it is in the right position to understand these issues and adopt progressive policies and initiatives, in order to help change the culture. As the bridge between management and the employees, HR can help communicate the right message across the organization. It can also ensure that necessary formal and informal reporting channels and redressal mechanisms are in place thereby promoting and encouraging employees to use the internal measures,” notes Vikram.

Despite conversations about gender diversity and inclusivity in tech on national and international levels, the disparity still exists. ‘Women are still underpaid, underrepresented and often discriminated’. The industry is yet to achieve gender balance even after 25 years. 
 

“HR should preach and practice non-retaliation, including protecting employees who speak out about discriminatory treatment. This will encourage other employees to voice their own concerns about discrimination and facilitate improvements in the workplace,” notes Jessica.

It has been 100 years since the 19th Amendment – Women’s Right To Vote. We still have a long way to go to achieve equal rights in the workplace. 

Pinterest’s case is a wake-up call for companies to take a deeper look at their diversity, inclusion and equity front. However, to understand to what extent will it change the gender equity landscape for females in Silicon Valley, we will have to wait a little longer for that to unravel. The choices we make today will have a greater impact on how the future will turn out to be.

Will 2021 be any different? 

Author Bio

Deepa Damodaran is the Manager and Editor of Excellence ePublications at HR.com. Connect Deepa Damodaran Follow @HRdotcom