Once again, that evil thing rears its ugly head. Forced arbitration. A former PayPal employee suffered some cut and dry gender discrimination at PayPal. PayPal, well known for being a utopia for bros (a Brotopia, if you will), is in the news again for gender discrimination.
Theresa Pasinosky was the perfect candidate for a new role at PayPal. The company had just acquired Xoom, a company she had worked for since 2006. PayPal needed someone to lead the international expansion of Xoom. Pasinosky was no stranger to international travel, and her experience doing international market research for three months in Europe made her a shoe-in for the job.
However, Julian King, a VP a PayPal, didn’t even allow her to interview. He stated it was because she had young children at home, and the job would feature international travel. This, obviously, wasn’t actually a problem for Pasinosky, who lived in Europe for 3 months with her family for Xoom before.
PayPal eventually hired Michel Kattan, father of a young child and former direct report of Theresa’s. They promoted someone who Pasinosky managed to now manager her. She had far more experience, had previously managed Kattan, and, King’s excuse that she had young children at home was obviously unimportant, as Kattan had a young child and was planning to adopt another. However, Kattan was a friend of King. King never made friendships, or, “bromances,” as they were referred to, with women.
Pasinosky has a cut-and-dry case of gender discrimination. But PayPal disagreed. Now they won’t let her case go to court.
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Pasinosky Fired
Theresa Pasinosky had an obvious case of gender discrimination. PayPal employees knew Julian King felt uneasy around women, and formed tight “bromances” with male employees frequently. He promoted an unqualified man and wouldn’t even allow a more qualified candidate to interview, simply because she was a woman with young children. King didn’t believe having children would affect a man.
Pasinosky brought her case to PayPal’s HR, but they dismissed her complaint as a “sham investigation.” Women know this struggle all too well. Sexism is pervasive in business, more so in tech than any other industry, and if Pasinosky didn’t want to ruin future chances within PayPal or at future companies, she’d have to accept the sexist decisions with grace. She did just that. She agreed to report to a far less qualified man, her former underling.
His inability to lead or pay attention was apparent. Kattan and PayPal HR disciplined Theresa for what she saw as normal conduct. Kattan had sent out an email to everyone, and Pasinosky had done a reply all, informing them that someone had already sent this message. That may seem cheeky, but by informing everyone the report Kattan had sent out was identical to a previous one, she saved those employees time differentiating between the two.
Two months later Pasinosky, after having worked for Xoom and then PayPal for nearly 12 years, was fired. She was fired immediately before she was supposed to get stock units and bonus pay, specifically as retaliation for complaining, she believes.
The Lawsuit that Should Be
Pasinosky is suing PayPal for discrimination, failure to prevent discrimination, retaliation, negligent training and supervision, breach of contract, breach of the covenant of good faith and fair dealing, and conversion. She’s seeking a trial by jury, damages, both financial and non-financial, and legal fees. However, PayPal, like many tech companies, uses forced arbitration to keep their employees from getting their right to due process.
Forced arbitration should be against the law, as defined by the U.S. Constitution. It forces workers to sign away their constitutional right to due process for work. It’s evil, manipulative, and cruel. Work is hard to come by, and the economy is unforgiving. Workers would be willing to sign anything to get the money they need to support themselves and their families. Forced arbitration denies employees the rights guaranteed to them by the Constitution.
“Many workers don’t think twice about signing an arbitration agreement as part of their new hire documents, and don’t want to jeopardize a job by asking questions or refusing to sign. What they don’t realize is that if they are later wronged by their employer, they will be forced to proceed in a forum that is tilted heavily in the employer’s favor, rather than pursuing their right to sue in court.”
– Mana Barari, an attorney for Pasinosky
Publicly, PayPal has only said they’re “currently reviewing the complaint.” Forced arbitration always favors the company. It allows them to bring in their own arbitrator to work as a “third party,” forcing the employee or former employee to settle out of court. The settlement includes non-disclosure agreements, which conceals details of the case and the settlement from the public.
Hope for a Lawsuit
Pasinosky is hopeful. California Senate Bill 820 went into effect this year. The law states that victims of sexual assault, harassment, and discrimination do not have to undergo forced arbitration. Because PayPal is operating in California, Pasinowsky’s attorneys claim this law applies to her case. The bill was specifically designed to force companies to deal with their sexual harassment and discrimination publicly. The idea being that the public exposure will be a greater reason to stop the bad behavior than a settlement alone would.
The PayPal Mafia
PayPal is no stranger to sexual harassment and discrimination. The company’s founders, all men, are now known in silicon valley as “The PayPal Mafia.” Many members of the group, like Peter Thiel, are outright sexists. Thiel has argued that giving women the right to vote has harmed the country. He and another PayPal founder wrote about “The Diversity Myth” and defended anti-gay harassment of a college student. Thiel, later, would work to destroy Gawker for outing him as gay.
In the LGBTQ community, we often call this “internalized homophobia,” that is, attempting to conform to heteronormativity and experiencing self loathing due to an anti-gay upbringing. However, with Thiel, it’s not very “internal.”
“He said, ‘I really enjoy playing hoops.’ I said, ‘We can’t hire the guy. Everyone I knew in college who liked to play hoops was an idiot.’”
– Max Levchin on how PayPal was founded
The rest of the PayPal Mafia have been equally hostile towards women and minorities. It’s no surprise, then, that PayPal would still have a “bro-y” atmosphere, or that a VP would pass over a more qualified candidate because she’s a woman and he doesn’t have a “bromance” with her.
The PayPal Mafia is credited with helping to spread a misogynistic worldview through Silicon Valley since the mid 2000’s. It’s far from the only reason tech is an unwelcome place for women, but members of the PayPal Mafia went on to found Tesla, YouTube, LinkedIn, Yelp, and others. Many have become venture capitalists, influencing and funding many companies across the web. They didn’t invent sexism in the valley, but they did help if find strong footholds.
Fighting Forced Arbitration
Laws like those in California aren’t enough. While it’s good to see that companies can no longer bury their sexual assault, harassment, and discrimination cases in California, it’s just one of 50 U.S. States. Many companies can find loopholes. This needs to be federal law or a ruling from the Supreme Court needs to prevent forced arbitration. Furthermore, the scope is too narrow. While discrimination and assault cases are particularly heinous, they’re far from alone. Racial discrimination, overworking employees, breach of contract, all should be given due process in a court of law, not forced behind closed doors. As long as they can continue to do so, companies will use forced arbitration to silence victims. We need to put a stop to it.
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