Binary Capital is being sued by a former employee for harassment

Troubled Silicon Valley venture firm, Binary Capital, whose co-founder resigned earlier this week after allegations surfaced of Justin Caldbeck’s predatory behavior towards women, is being sued by a former employee for harassing and defaming her after she resigned from the firm, Bloomberg reports.

The employee is Ann Lai, a principal at Binary until May 2016. In the lawsuit, filed in the Superior Court of California in San Mateo County, Lai claims Caldbeck texted her repeatedly after she left the firm, threatening her not to disparage or divulge information about the company.

According to the lawsuit, Caldbeck messaged Lai after she had left the company, writing: “I’m not going to warn you again. Please stop and don’t add ill will. It didn’t work out. I have egg on my face for supporting you and I’m sure you are disappointed w your experience but don’t put us in a situation where we need to be more aggressive.”

The lawsuit further claims the firm’s employment agreement contains illegal provisions regarding confidentiality and non-disparagement — which Lai says she notified California’s Labor & Workforce Development Agency about. Binary also threatened to withhold Lai’s share of profits from investments as part of its attempt to keep her quiet, according to the complaint.

“Binary discriminated against Lai because she disclosed, or because Binary believed she had disclosed, information about her working conditions after her employment with Binary had ended,” the complaint states. “This discrimination took the form of discouraging others from hiring her, threatening her with litigation, threatening to ruin her career, and sending her harassing and threatening texts for the purpose of discouraging her from engaging in conduct protected by law.”

Lai’s reasons for leaving Binary, according to the lawsuit, were its “sexist and sexual environment” including inappropriate conduct with female staff at company outings; a female-specific dress code; and statements about the attractiveness of Lai and other women, including female startup founders.

In the complaint, Lai said Caldbeck began pressuring her after she left the firm — and after she had complained about the behavior — to try to keep her from talking about her experience at the firm. The suit argues that Binary’s actions caused Lai economic and emotional harm. She is seeking civil penalties, attorneys’ fees and costs, economic and general damages.

We’ve reached out to Lai and Binary Capital for comment and will update this story with any response. According to LinkedIn Lai spent one year five months working at the firm, starting in January 2015.

Yesterday Axios reported that Binary’s other co-founder, Jonathan Teo, had offered his resignation to the firm’s investors, following a vote by the investors to suspend operations of both the firm’s funds. In his letter to investors, Bloomberg reports that Teo raised concerns this his own behavior was facing scrutiny, writing: “media coverage and continued questions regarding my behavior that has occurred these past few days has been a distraction”.

As we wrote yesterday, for all practical purposes the young early stage firm looks to be shutting down, as its limited partners seek to dissolve it and withdraw their funds from association with the sexual harassment scandal.