A former PayPal employee filed a gender discrimination complaint against the company on Thursday, alleging that her supervisor passed her up for a promotion because the job would require international travel and she had young children at home. Instead, the complaint says, her male colleague with a small child was given the job.
Theresa Pasinosky is seeking to have her complaint heard in a trial by jury, but according to the complaint, PayPal may force her to settle her dispute by a third party behind closed doors due to an arbitration agreement she says the company had her sign.
The case serves as yet another challenge to the practice of forced arbitration agreements, a common legal tool, historically used widely in the tech industry, to keep employees from sharing their horror stories or harassment and discrimination in public.
In early 2017, Pasinosky’s complaint says, she approached Julian King, a PayPal vice president, about a new role he was hiring for: someone to lead international expansion of Xoom, a company PayPal had acquired in 2015. Pasinosky had worked for Xoom since 2006 and, according to the complaint, travelled six to eight times a year for her job, “often internationally,” and had moved her family to Europe for three months in 2017 at her own suggestion to perform market research for Xoom. Armed with these credentials, Pasinosky told King that she was the ideal candidate to lead the company’s international expansion.
However, according to the complaint, Pasinosky recalls King saying something to the effect of, “The position requires lots of international travel, and you have small kids at home.” Pasinosky says she was ultimately not even interviewed for the position.
Instead, the complaint says, King hired Michael Kattan, a father of one young child and who had allegedly told co-workers he planned to adopt another. Pasinosky also alleges that Kattan was less qualified than her. According to the complaint, she hired Kattan and served as his direct supervisor from 2012 until 2015.
The complaint further claims that King created close working relationships with male colleagues but not female colleagues, and that his “uncomfortableness around female colleagues resulted in favoritism for male employees over female employees that was widely known throughout the workplace and referred to as ‘bromances,’” and that his “bromance” with Kattan was also well-known.
Pasinosky filed a gender discrimination complaint with HR in July 2017. Two months later, after what her complaint characterises as a “sham investigation,” PayPal told Pasinosky that she could either report to Kattan, request additional time to find another opportunity within the company, or take a severance package and leave. In October 2017, she said she would report to Kattan.
The following month, she was disciplined in a meeting with Kattan and PayPal HR for “several incidents” that Pasinosky believed to be “normal everyday conduct,” such as replying-all to an email from Kattan saying that the email he had sent had already been sent around.
In December of 2017, about four months after she filed her gender discrimination complaint and after nearly 12 years with the company, Pasinosky was fired for alleged insubordination, the complaint says. It further states that her termination came 11 days before hundreds of thousands of dollars in restricted stock units were set to vest.
She was also supposed to get additional stock units and a bonus pay soon after. Pasinosky believes her termination was timed so that she wouldn’t receive these benefits.
Pasinosky is alleging 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 against PayPal.
She is seeking economic, non-economic, and punitive damages, and costs of attorney fees. She is also seeking a trial by jury, but according to the complaint, PayPal may force her to settle her dispute through arbitration.
A PayPal spokesperson told Gizmodo in an email that the company was “currently reviewing the complaint.”
“The company takes all complaints seriously and we thoroughly investigate all claims,” the spokesperson added. “Creating a safe and respectful work environment is foundational to PayPal’s values.”
Pasinosky had a mandatory arbitration clause in her contract, according to her complaint. That means that when she signed her employment agreement with PayPal, she waived her right to a trial by jury. These clauses are common across the tech industry, and only recently have we seen meaningful changes to eliminating them due to pressure from tech workers and the public.
But the practice has proven to be an effective way to keep misconduct out of the spotlight, as arbitration oftentimes favours the employer.
“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,” Mana Barari, an attorney for Pasinosky, told Gizmodo in an email. “What they don’t realise 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 favour, rather than pursuing their right to sue in court.”
Gordon Kaupp, another of Pasinosky’s attorneys, noted California Senate Bill 820, which went into effect this year. It effectively bans settlement agreements from silencing survivors of sexual assault, harassment, and discrimination, arguing that his client would potentially fall into this category.
Kaupp said in an email that this bill “was enacted to prevent defendants, including employers, from being able to keep sexual harassment confidential and hidden out of a belief that sunshine is an effective antiseptic. Because the “entire arbitration process is conducted in the dark,” he added, forcing employees to carry through with that process “absolutely undermines the compelling interest afforded by public prosecution of discrimination claims in employment.”