Money and Business/Financial Desk: New Economy, Same Harassment Problems

Cites consultant Kerry J. Sulkowicz
Featured on New York Times

Almost from the moment she started her new job as a software engineer at Juno Online Services Inc. in 1997, Lori Park had been intrigued by the tall and wiry Matthew Battles. After they met at a party, they wound up in a hip-grinding dance in the wee hours of the morning at Au Bar, a nightclub on East 58th Street in Manhattan. Over the next couple of weeks they ate meals together, went to museums and got to know each other.

But the young man with the long blond hair was not only a friend and not just a colleague — Mr. Battles was a senior vice-president of the company. As they decided how intimate they would become, the propriety of an executive dating an employee became an issue.

”He said if I don’t get involved in a relationship with him he can be like my No. 1 fan in the company,” said Ms. Park, recalling their conversation. ”If I date him, then he won’t be able to help me out at all.”

But in the insouciant world of Internet companies, where old economy conventions were disdained and rule books rejected, office romances and other corporate taboos flourished. The medium itself, the Internet, commingles the intensely private with the openly public, and this idea suffused the relationships that developed among high-technology workers. Many believed that they were building a new world, with new ways of doing things, and with that conviction came a sense that many of the old verities — about management techniques as well as office protocol — no longer applied.

But less than two years after Ms. Park began dating Mr. Battles, she sought redress from this new world and sued him, as well as her former supervisor, Mark A. Moraes, and Juno itself, for $10 million. It was one of the first publicized sexual harassment suits against an Internet company, and it shocked the industry because harassment, sex discrimination and retaliation were supposed to be diseases of the old economy. The new economy was supposed to be better for employees, but in some ways it turned out to be worse.

In her suit, filed in November 1999 in the State Supreme Court in Manhattan, Ms. Park alleged that Juno created a hostile work environment in which Mr. Battles and other male supervisors considered women to be ”sexual objects,” discussed which female employees they wanted to have sex with and referred to others with vulgar terms such as ”slut” and ”whore.”

Juno’s lawyers denied these charges in a written response to Ms. Park’s subsequent demand for arbitration. They also contended that Ms. Park herself routinely indulged in profanity and sexually charged language.

At the peak of the Internet boom early last year, disgruntled new economy workers rarely tried to settle differences through the courts. They simply quit and got a couple of job offers from other start-ups as they walked out the door. ”People wanted to get on with their jobs, and in a red-hot economy they could,” said Garry G. Mathiason, a partner with Littler Mendelson, an employment-law firm based in San Francisco with no stake in the case.

If a woman went to the trouble of hiring a lawyer to formally protest her treatment, said Mr. Mathiason, a check for $10,000 or $15,000 might have been issued, apologies made and the matter closed. But this year alone, Internet companies have already shed more than 80,000 jobs, according to the outplacement firm of Challenger, Gray & Christmas. As new jobs became harder to find, former employees began to couple claims of wrongful termination with unequal treatment, harassment and other charges.

Littler Mendelson, which has represented more than a thousand Internet-related businesses, estimates that two out five managers at such companies will be the targets of lawsuits in the coming years, twice the rate of the managers of bricks-and-mortar businesses, mainly because they didn’t have the policies and procedures in place to handle employee complaints.

Although many Internet businesses tried to limit their liability by requiring workers to sign employment contracts agreeing to settle disputes through arbitration, some still wind up in protracted legal battles. In Ms. Park’s case, the court compelled arbitration because she had signed such an agreement at Juno. But the suit nonetheless dogged the company for a third of its existence: from just after the company first sold its stock to the public in May 1999, to its recent announcement that it planned to merge with another Internet service provider, NetZero Inc. Juno would not say if settling the suit was a condition of the merger.

This summer, the suit was finally settled for an undisclosed sum between $75,000, the figure offered by Juno, and $300,000, the amount demanded by Ms. Park before negotiations began.

Ms. Park’s suit was ”resolved without any admission of liability or concession by any of the parties,” according to Terri Ross, a lawyer who represents Juno. Although none of the parties was allowed to comment on the case once settlement talks started, Ms. Park had earlier described her experience with the company and her relationship with Mr. Battles. Several interviews with her over the course of almost a year show how this young couple, who grew up with the values of the women’s movement, came to be involved in charges of sexual harassment, and how Ms. Park was at the center of many forces — management inexperience, a new old-boy network and rampant office intimacy — that to one degree or another ravaged the Internet industry.

Ms. Park came to Juno at the end of 1997, lured by a salary of $70,000, a signing bonus of $25,000 and the promise of a year-end bonus of perhaps $20,000 — all told, more than twice what she had been making as a software engineer for Sun Microsystems Inc. at its site in Chelmsford, Mass. At that time, Juno had been providing free e-mail to people without Internet access. She was hired to help write the server software needed to enroll paying customers in the company’s new Internet-access service.

As part of the free-spending Internet culture, Juno put her up in what she described as ”this really huge, nice apartment” on West 86th Street and Broadway in Manhattan while she looked for a place of her own. Less than two weeks after arriving, Ms. Park, who was then 23, celebrated her good fortune by throwing a party; among the guests was Peter D. Skopp, a Juno senior vice president who had interviewed her for the job. Mr. Skopp brought along Mr. Battles, who was then 24.

When the party broke up, Ms. Park and several guests went to Au Bar. She said she started dancing by herself and was joined by Mr. Battles, who began ”dirty dancing” with her.

”I just stood back from him and I said, ‘You are so bad,’ ” she said. ”And he was like, ‘No, you are so bad,’ and I was like, ‘No, you are so bad’ and I said, ‘You are a senior vice president’ and then he like ran away.” Mr. Battles, she said, left the club. Mr. Battles did not respond to requests for an interview. According to his Web site, he is currently in Mexico City studying Spanish.

Nonetheless, she continued to see Mr. Battles, and the two became romantically involved. There were half a dozen couples in the office, and the president and chief executive, Charles E. Ardai, dated and later married a woman who had worked there. Juno’s corporate policy only prohibits managers from dating employees they supervise. Ms. Park, a programmer, never reported to Mr. Battles, who worked on the business side.

To understand how a consensual relationship wound up in a sexual harassment charge, it helps to know how Ms. Park viewed harassment. She said she thought Anita Hill was lying about sexual harassment during her testimony at the Supreme Court confirmation hearings for Clarence Thomas in 1991. Ms. Park was 17 then, and said she did not believe that sexual harassment existed. She said she had not experienced it growing up near Lansing, Mich., or later while studying at Harvard.

In fact, Ms. Park said she didn’t think she had experienced sexual harassment at Juno until she read a sexual harassment complaint filed by a former Juno employee, Lisa Bongiorno. It was then, Ms. Park said, that she realized ”the same thing had happened to me.”

In August 1999, Lisa Bongiorno, a former marketing manager at Juno, filed a $10 million lawsuit in State Supreme Court in Manhattan against the company, claiming she was pressured into having sex with a vice president, Jordan S. Birnbaum, and then fired when she stopped sleeping with him. Juno said Mr. Birnbaum no longer worked there, and Mr. Ardai, the chief executive, declined to be interviewed for this article. But on the Web site of The Industry Standard, a magazine about the new economy, and in Glamour magazine, Mr. Ardai has been quoted denying this allegation. Neither Ms. Ross, the lawyer for Juno, nor Robert Levy, who represents Ms. Bongiorno, responded to requests for interviews. The case is in arbitration.

Reading the complaint’s depiction of a hostile work environment and descriptions of retaliation educated Ms. Park about harassment. At the time, Ms. Park no longer worked at Juno and was negotiating a settlement with the company because she felt she had been forced out for ”being a woman in a man’s role,” she said.

Ms. Park’s sexual harassment charge against Mr. Battles and the firm arose after a more protracted struggle she’d had with her former boss at the company, Bruce Zenel. Mr. Zenel managed a technical group of four, and then five programmers, of whom Ms. Park was the only woman.

She said that almost from the start he would look over her shoulder and tell her what keystrokes to make. ”He would like try double-checking every little thing,” said Ms. Park.

Ms. Park said she thought her work was more closely scrutinized than that of the male programmers. ”I’m telling you, I never messed up,” she said. As time went on, she said, Mr. Zenel stopped inviting her to meetings with the other programmers, and did not give her technical specifications on a timely basis, although she needed them to do her job.

Mr. Zenel did not respond to requests for an interview. He has since been promoted to vice president at Juno. Lawyers for Juno, in their response to Ms. Park’s charges filed with the American Arbitration Association, said she had ”received supervision appropriate for a junior programmer with limited work experience,” and acknowledged that she ”was not included in some design meetings,” and ”was told that she did not have strong communication skills.”

Mounting research on the failure of women to thrive at work indicates that they have good reason to be concerned about the kind of communication problems that Ms. Park experienced.

In her book ”Why So Slow? The Advancement of Women,” Virginia Valian, a psychology and linguistics professor at Hunter College, wrote, ”A woman who aspires to success needs to worry about being ignored; each time it happens she loses prestige and the people around her become less inclined to take her seriously.”

SEEKING advice on how to resolve the problems with her supervisor, Ms. Park said she turned to Mr. Battles, who told her that the technical area preferred to resolve problems on its own, without involving other departments such as human resources. She then sought guidance from Mr. Skopp, the senior vice president who had hired her. But Mr. Skopp, she said, acknowledged that because he and Mr. Zenel were friends from graduate school at Columbia University, it was hard for him to be impartial. (Mr. Skopp did not respond to requests for interviews.)

As communications with Mr. Zenel deteriorated, Ms. Park said she sought help from Merrily Sturcke, the head of human resources. Initially, Ms. Park said she had resisted Ms. Sturcke’s suggestions that Ms. Park meet directly with Mr. Zenel, fearing he might retaliate against her. But in December 1998, she agreed to participate in a meeting with Ms. Sturcke, Mr. Zenel and Mr. Moraes, who was Juno’s executive vice president of technical services.

During the eight-hour meeting, when Ms. Park tried to argue that she was treated differently than the other members of the team because she was female, she said Mr. Moraes demanded to know, name by name, whom she was accusing of discrimination. Ms. Park was ”harangued and abused” at the meeting, according to the complaint.

In their response to her arbitration demand, lawyers for Juno said there was frustration on both sides during the meeting because of Ms. Park’s ”continual refusal to accept that her role in the department was that of a junior programmer and her failure to accept responsibility for failing to follow the work directives of her supervisor.” They also said that the human resources department and her managers investigated her ”speculation” that the ”complained-of treatment” might relate to her sex, but concluded that it did not and that ”she received direction and compensation commensurate with her status as a junior programmer.”

The length of the meeting shows how underdeveloped Juno’s human resource procedures were, experts said.

”Anybody who is skilled in H. R. would tell you that any part of that kind of arrangement was dead wrong,” said Mr. Mathiason, the Littler Mendelson lawyer whose firm represents employers. ”Putting the two antagonists in a room, putting them there together for eight hours, just invites all kinds of claims.” Such an arrangement, he said, could easily lead a judge or jury to conclude that the manager became angry at the employee for bringing the charge instead of patiently and dutifully conducting an investigation.

Such situations demonstrate the inexperience of young managers, said Kerry J. Sulkowicz, a psychiatrist and president of the Boswell Group, a consulting firm in Manhattan that often advises young entrepreneurs who are having difficulty managing their staffs. ”Without understanding the tools of leadership, the managers adopt a very authoritarian style like the way adolescents, who are feeling very insecure, become bullies,” he said.

At a meeting the day after that marathon meeting, where they were supposed to design a better way of working together, Ms. Park said Mr. Moraes yelled and snarled at her.

In its response to Ms. Park’s demand for arbitration, a copy of which was made available to The New York Times, Juno rejected her characterization of this meeting, saying that she and Mr. Zenel, who also attended the meeting, had a constructive dialogue about how they would work together in the future.

By this time, another employee might have given up and left, but Ms. Park felt she had done nothing wrong, and saw the issue as one of equal opportunity. Her mother, Carol Park, encouraged all three of her daughters to take calculus in school because she herself had been afraid to take it. She gave Lori, the eldest, a halter-top that said ”Anything boys can do, girls can do better.” Lori Park said she became accustomed to competing in mathematics, mechanical engineering and computer science, areas traditionally dominated by men.

Following the December meetings, Ms. Park scored a 2.8 in her year-end review, lower than her midyear review of 3.0. ”They made a special new category for me called ”Relationship with Management” and I got a special low score on that. They said I was a technical superstar but I have such bad behavior problems,” said Ms. Park, who interpreted the review as retaliation for her complaints. She requested a transfer out of Mr. Zenel’s programming group and said she was demoted to the mail-server group. In the arbitration documents, Juno’s lawyers denied that this was a demotion and said she received a negative performance review because ”her difficulty interacting with her co-workers and her continual refusal to follow her manager’s instructions was a drain on management resources.”

Perhaps the Juno environment sent mixed signals about her expected contribution. By putting her up in an expensive apartment on the Upper West Side, casually attending her party and becoming very friendly with her, senior managers seemed to give the impression that she, a subordinate, was welcomed among the decision makers. While Juno officers, like those at many other Internet startups, sported the image of an egalitarian organization, Ms. Park saw it as a rigid, even club-like hierarchy.

Her ordeal strained Ms. Park’s relationship with Mr. Battles because she said she increasingly saw him as part of the hierarchy that no longer wished to hear about her problems. ”He thought they were treating me badly, but he didn’t do anything about it, and it was his responsibility as a senior officer to do that even if it is his girlfriend,” said Ms. Park.

Just after 1999 began, Ms. Park said she wanted to break up with Mr. Battles, but feared she would be fired if she did. The way Ms. Park saw it, women at Juno who ended relationships with co-workers — who were often senior to the women — had to leave. Mr. Battles’ previous girlfriend had left the company, and there was Ms. Bongiorno, who had been fired.

When she asked Mr. Battles whether she would lose her job if they broke up, she said he told her, ”You know you’re not in the club like I am.” She said she tried to meet with the human resources representative several times to tell her about her fears, but was not taken seriously. In its response to Ms. Park’s charges, the company asserted that Ms. Battles ”never influenced or sought to or threatened to influence Juno’s personnel decisions concerning” Ms. Park, and that she never complained of sexual harassment. The couple broke up in the spring of 1999.

When Juno first sold shares to the public, the stock opened at $13 and fizzled to $11.64 at the close. That evening, staffers gathered to mark, if not celebrate, the event at Citron 47, a bistro on West 47th Street. Ms. Park said she asked Mr. Battles to leave the party and escort her to his apartment to retrieve some of her things. Outside the restaurant, she alleged in her lawsuit, he dragged her down the street, punched her in the stomach and slapped her. In its response to her demand for arbitration, Juno said that Ms. Park was intoxicated and had provoked the incident by ”verbally and physically assaulting” Mr. Battles.

Ms. Park filed an assault complaint with the New York City Police Department, but did not press charges. When asked if there were any witnesses to the incident, Ms. Park said she was trying to find a waitress at the restaurant.

After the incident Ms. Park said she started taking the antidepressant Paxil, which had been prescribed by a psychiatrist she had been seeing, to reduce her anxiety. That spring, she said she lost 13 pounds.

Ms. Park’s personal and professional worlds were wrapped up in Juno. When they unraveled, she again sought a solution to her problems from the firm. She said she met with Mr. Ardai, the chief executive, and told him she was being driven out of the company. She said they discussed giving her a year of severance pay if she would quit and Mr. Ardai asked her to have her lawyers get in touch with the company’s lawyers. In a subsequent meeting with Mr. Ardai, she said she informed him of the alleged assault by Mr. Battles.

”He said that it wasn’t clear that I should have told him and that it does not really relate to Juno,” Ms. Park said. ”I said I disagree.”

Ms. Park said Juno offered her only $10,000, instead of the year’s severance she had discussed with Mr. Ardai. She refused the offer and filed her suit.

Ms. Park said she first embraced the culture of Juno because it was filled with young people she thought she could trust. During her last interview with a reporter before settlement negotiations began, she said that she regretted getting involved with Mr. Battles, but was proud of her effort to stand up to the company. ”If I don’t stand up for myself,” she asked, ”who else will?”

Since her experience, Ms. Park said she had been informally counseling other young women who believed they had encountered harassment and discrimination at work on how to build a legal case against their employers.

Written by Susan E. Reed