Benner on Tech: Parsing a Sexual Assault Suit

Katie Benner is a Bloomberg View columnist who writes about technology, innovation, and the cult and culture of Silicon Valley. She lives in San Francisco.
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People are Talking About…

Last week, a former Stanford University student, Elise Clougherty, filed an explosive sexual assault and harassment lawsuit in federal court in San Francisco against Formation 8 Partners' co-founder Joe Lonsdale, one of Silicon Valley’s most prominent venture capitalists. Lonsdale filed a counterclaim for defamation. (Here’s Clougherty's complaint, and Lonsdale’s counterclaim.)

This case could become the highest-profile sexual harassment lawsuit to hit the tech industry since Ellen Pao sued Kleiner Perkins for gender discrimination, alleging that she suffered retaliation for complaining about sexual harassment. The Pao suit goes to trial on February 17, more than two and a half years after Pao filed her claim.

The Clougherty suit lands just as broader and troubling questions about the treatment of women in the technology industry are top of mind and amid a heightened national discussion of rape that extends from college campuses to Bill Cosby to the NFL. It also comes on the heels of a graphic gang rape account involving a fraternity at the University of Virginia that ran in Rolling Stone and which has largely been discredited

This larger conversation is thorny because it asks us to grapple, all at once, with questions about institutional power, individual power, the specter of false accusations, our darkest thoughts about men and women, and our national aversion to sexual and physical abuse.

In addition to an influential investor, the Clougherty suit also involves Stanford, a school so central to the tech industry that the New Yorker called it “the farm system for Silicon Valley.”

Clougherty claims that Lonsdale, her mentor in a Stanford entrepreneurship class in 2012, subjected her to extreme sexual violence and emotional abuse after they began dating. Before suing Lonsdale, Clougherty opened a case against him in 2013 with Stanford, which ultimately banned him from campus for a decade.

Lonsdale has set up a website with links to Clougherty’s adoring emails, none of which indicate that he was ever abusive. The site also features his statement noting that the relationship fell apart because of her emotional instability. He also says that Stanford refused to hear him out and was cowed by Clougherty and the attention that campus rape has gotten in the media. 

I reached out to lawyers for Clougherty and Lonsdale, as well as Stanford. A Stanford spokesman said that when the university conducts an investigation, it always allows both parties to be heard and present evidence.

Lonsdale’s lawyers’ statement is here on his website. It says in part:

This lawsuit is a vile collection of lies and a transparent attempt to destroy the reputation and good name of Joe Lonsdale.  To borrow the words Ms. Clougherty used in a text to a friend, this is a "take down scheme." The overwhelming and unequivocal evidence -- which includes hundreds of emails from Ms. Clougherty herself and testimony from her close friend -- will exonerate Mr. Lonsdale.

Clougherty’s lawyers say:

“Our client is not surprised by the response from Mr. Lonsdale and is not intimidated by his counterclaims or his PR materials.”

Lonsdale’s trove of emails and documents was live just hours after he was sued, including a declaration from a friend of Clougherty’s that says the plaintiff is lying. That statement was signed on October 29, 2014, three months before Lonsdale was even sued. So Lonsdale has clearly been preparing his defense for some time.

Given the acrimony, a settlement seems unlikely and the case could drag on for years. Remember that complicated national conversation I mentioned earlier? Whatever the outcome, this case is sure to touch on most, if not all, of those issues.

The case has already set the venture industry abuzz, and people are chattering quietly about it behind closed doors. That's well and good, but whispering about a scandal rarely leads to positive change. This is a high-profile case and I hope that it sparks a public conversation among investors, executives, universities, students and tech employees about how power, responsibility, sex and gender play out in one of the world's most pivotal  industries. 

** In other women in tech news:

* Fortune’s Dan Primack says that the number of women who could be considered “decision makers” at 92 large venture firms remained a pretty steady 4.2 percent of employees between this year and last. When smaller VC firms are included in the mix, 5.6 percent of decision makers are women.

* Media critic Rachel Sklar writes that it’s ridiculous to conflate the lack of female investors with a dearth of women in math and science because many male investors -- like Ron Conway and Ben Lerer -- are not engineers and majored in things like political science.

** Palate cleanser: Proctor & Gamble’s “#LikeAGirl” female empowerment spot generated more social media buzz than any other Super Bowl ad, TechCrunch reports. It’s really good. Watch it here.

Ventureland

Uber Ad Nauseum

** Bad scores can now affect how long passengers must wait for rides, according to the New York Times. It should go without saying, but don’t be a jerk to your driver.

** The New York Times also says that Uber is trying out a less combative approach to expansion.

** Uber (and Lyft) may see their business models change dramatically if they lose federal lawsuits that say their drivers should be employees and not independent contractors, BuzzFeed reports.

Airbnb said that it now collects taxes in Amsterdam and San Jose, and that it will begin collecting taxes in Chicago and Washington, D.C. on February 15.

Zenefits is getting help from the Utah state legislature, which proposed a bill to reverse the state insurance department’s ban on the company’s free services.

People and Personnel Moves

Yoky Matsuoka, Nest's vice president of technology, and Greg Duffy, the co-founder of Dropcam, have both left Nest, according to the Verge. Matsuoka is reportedly leaving to join Twitter. There was no information about what Duffy will do next.

Europe’s youngest entrepreneurs, as presented by the New York Times, will make you all feel like over-the-hill failures.

Companies

Amazon…

The online retailer now has co-branded websites with three universities to sell textbooks, fan gear and dorm staples like instant ramen, the Wall Street Journal reports.

IBM…

A year after forgoing a bonus due to poor performance, the company’s chief executive Ginny Rometty will get a $3.6 million bonus for 2014, reports the Wall Street Journal. IBM recently reported another round of disappointing earnings.

Netflix…

Reed Hastings’ prediction that online streaming television will be the norm seems to be coming true. The Wall Street Journal’s Miriam Gottfried argues that this makes life harder for Netflix.

Twitter…

Re/code’s Kara Swisher finally asks the obvious questions: When will the activists come for Twitter?

Cybersecurity Blotter

Scientists need just four pieces of information to identify 90 percent of shoppers whose identity had been made anonymous, the New York Times reports.

An accused Russian hacker can be sent to the U.S. for trial, Bloomberg reports.

Verizon now lets customers opt out of a tracking program that privacy experts hated, reports the New York Times.

Media Files

Time Warner Cable lost subscribers due to cord cutting, USA Today reports.

The Sundance hit film "Tangerine" was shot completely with an iPhone 5S, an $8 app and a steadicam, reports the Verge.

News and Notes

When the smartphone began to supplant the PC, the smartphone supply chain came to dominate the tech industry, argues Andreessen Horowitz’s Benedict Evans.

The Pirate Bay is back after a two-month outage for the file-sharing website, VentureBeat reports. 

This column does not necessarily reflect the opinion of Bloomberg View's editorial board or Bloomberg LP, its owners and investors.

To contact the editor on this story:
Timothy L. O'Brien at tobrien46@bloomberg.net