Forbes: California Bill Tweaks Sexual Harassment Law To Account For Venture Capital

August 27, 2017

California Bill Tweaks Sexual Harassment Law To Account For Venture Capital

Janet Burns, Contributor

Following numerous public revelations about bad behavior in the tech industry, a Golden State senator wants to ensure that founders and funders are in line with the law.

Last week, Senator Hannah-Beth Jackson introduced a bill to the California legislature that targets sexual harassment in venture capital, several instances of which have recently made waves across the state and country. The proposed SB 224, which was re-purposed from a previous bill, would seek to tackle the inappropriate, sexually harassing behavior that many women founders and entrepreneurs endure by adding a single word to the state's current law in this area: "investor."

Jackson, who represents California's 19th District, commented by phone that the bill would "clarify the language" in California's civil rights act by updating its list of specific relationships that are subject to sexual harassment protections. "We simply want to add investors to that list, and acknowledge that this simply unlawful behavior is subject to claims of sexual harassment and damages," Jackson said. 

The state's civil rights act already establishes certain behavioral boundaries for employers, teachers, lawyers, social workers, real estate agents, dentists, and various other professional roles--all of which frequently create unequal footing between parties, the senator pointed out. "These are relationships where there is an imbalance of power that could result in sexual harassment," she said.

As the nation's startup- and funding-rich tech industry has grown up, imbalances have also appeared in the numbers for the industry's men and women, with regard to both headcounts and capital. "We’ve been asking for some time, 'Why is this industry so male-dominated?'" Jackson said. But neither company reps nor algorithms could fully account for those gaps. 

See also: Women Get More Questions On Risk From Startup VCs Than Men Do--And Far Less Money

Thanks to ongoing media reports of "rampant harassment of women entrepreneurs," Jackson said, lawmakers and the public are "now getting a clear view of underside of this male-dominated industry, and only coming to see this behavior in the tech industry in full measure as women have been willing to come forward and say, 'I haven’t been taken seriously,' or, 'I have faced sexual harassment.'"

Given the kind of culture that we now know has been afflicting the industry, such as produced the "outrageous" Google 'manifesto' of late, it's understandable that many women founders have been hesitant to speak up, Jackson said, whether or not HR has already proven ineffective. "Another reason they haven’t come forward is that they haven’t felt they have legal protection as someone who is seeking financial support from an investor. We want to make sure they have same protections in [venture capital] as they would with a dentist, attorney, or financial planner."

"This kind of behavior is demeaning and inappropriate, it potentially undermines a woman's career progression, and it has economic consequences," she said. "If a woman says no to a sexual advance from an investor, and next week someone with a very similar idea gets funded, she loses a business opportunity. The [updated] law allows her to potentially make a case that this harassment cost her a significant business opportunity, and could subject that investor to liability of damages for that loss."

"This is a world where we’re at the intersection of power and opportunity," Jackson continued.

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