VC Lawsuit Highlights Need for Discrimination Policies

Head in HandsIf you follow the worlds of startups and venture capital, you have probably heard of the sex discrimination lawsuit that Ellen Pao has filed against her former employer, the prestigious venture capital firm Kleiner Perkins Caufield & Byers. While there are all sorts of interesting details in the case, one item leapt out at me from an article in today’s New York Times covering the trial:

“Yet even allowing for the fact that all the witnesses so far were called by Ms. Pao’s team, documents and testimony in the trial show a firm whose attitudes derived from an earlier era. When Mr. Hirschfeld asked for a copy of Kleiner’s manual on discrimination, it could not be found.”

Mr. Hirschfeld was the independent investigator hired by Kleiner Perkins to look into Ms. Pao’s allegations. Kleiner Perkins isn’t a new company, mind you. It was founded in 1972. And it’s not cash-strapped, either. KPCB is one of the most successful VC firms in the world, and has made billions of dollars off of investments in companies such as, AOL, Google, Intuit, and Electronic Arts. So the company has clearly had the time and the resources to put together an anti-discrimination policy. If it has one, however, nobody seems to know where it is. No wonder they are getting sued for sex discrimination! And no wonder the tech industry that KPCB has nurtured for more than 40 years has a problem with discrimination towards women.

So what’s the lesson here, especially for tech startups? First of all, don’t wait for 40 years, or until you get sued, to start thinking about anti-discrimination policies. The time to create an anti-discrimination policy is when you hire your first employee. Second, don’t create a policy and then stick it in the back of a file cabinet or in a box in the closet where you keep the cleaning supplies. Use the policy. Teach it to new and existing employees. Update it at least once a year. Make it a part of your culture, even more than free snacks or bringing your dog to work or unlimited vacation time.

That’s really the most important takeaway: make your anti-discrimination policy an essential part of your company culture, from Day One.

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