Sen. Hannah-Beth Jackson (D-Santa Barbara) plans to introduce a new bill, SB 224, to explicitly prohibit sexual harassment in the venture capital industry. Jackson’s bill comes in light of numerous reports from female founders alleging sexual harassment and misconduct when seeking funding from venture capitalists. Right now, there is a legal gray area when it comes to the relationship between an investor and a startup founder.
SB 224 seeks to amend the Unruh Act, a California civil rights law that prohibits discrimination based on things like sex, race, religion, age and disability. The Unruh Act currently prohibits sexual harassment between people who have a business relationship but don’t work for the same company. That includes relationships with attorneys, landlords, teachers, physicians and other professionals, but does not explicitly include investors.
Jackson’s bill would clarify the “unique nature of the investor/entrepreneur relationship” and, more specifically, would include an investor as someone who may be liable for sexual harassment.
“Every woman deserves a workplace free from harassment, especially women who are starting their businesses and may be even more vulnerable to inappropriate coercion. Gender discrimination in business relationships must end,” Jackson said in a statement. “Many of these investors act as gate keepers to an industry. The brave women who have come forward in recent weeks to share their stories and experiences have peeled back the shroud of secrecy and exposed behaviors that are not acceptable in any industry, let alone the growing tech industry which is so important to our economy.”
Jackson introduced the bill last week, but does not plan to seek a vote for SB 224 until the legislature reconvenes in January. The first committee hearing will take place in January, followed by a vote on the Senate floor by the end of January 2018.
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