Sunday, 2 June 2013

A Few Thoughts On The Phaneesh Murthy Matter



“Phaneesh Murthy has done it again!”

“How can a man be so stupid? ”

“How on earth did he become CEO of a company after having been in trouble once?”

All of these are legitimate questions, but some basic questions haven’t been asked amidst so much twittering and chattering over Murthy’s alleged peccadilloes.

According to reports, Murthy’s accuser Araceli Roiz is pregnant and Murthy is supposed to have forced her to abort the child she’s carrying. Murthy’s case is not helped by the fact that in the past he has faced similar claims. While working for his previous employer Infosys, Murthy was sued for sexual harassment by his executive secretary Reka Maximovitch, a Bulgarian American national. Around the same time, a similar charge was laid at Murthy’s door by one Jennifer Griffith. Murthy lost his job with Infosys as a result of the Maximovitch’s accusations which seemed to carry a fair amount of truth in them.

Sexual harassment can take various forms. Within a work place, sexual harassment is said to take place when a person is pressurised or coerced by the employer or another employee to provide sexual favours in exchange for keeping one’s job or for getting pay hikes or other perks. Use of sexual innuendoes or jokes or plastering walls with graffiti of a sexual nature could also be perceived to be harassment. After reports of Rioz’s charges against Murthy surfaced there have been legitimate demands that India Inc. should put in place better safeguards to prevent workplace harassment.

All employers in the West have detailed in-house rules which are meant to prevent sexual harassment within the work place. The requirement to report even a consensual relationship between two employees, which iGate had, is as much meant to prevent the possibility of one of the employees in the relationship doling out-of-turn favours for the other, as it is to prevent harassment. If Murthy had formally disclosed his relationship with Rioz, any pay hikes recommended by him for Rioz would be under the scanner.

Murthy’s job, running the US operations of an outsourcing firm, was not an easy one. In the US where there is so much anti-outsourcing sentiment, imagine a job which involves constant meetings with top officials of leading companies, with the objective of persuading them to outsource to India. By all reports, Murthy was very good at his job, despite having a first name which lends itself to a variety of interpretations and would not have helped him cold call potential clients. In fact, he built up such a reputation at Infosys that, even after his first downfall, iGate was willing to employ him. Murthy is supposed to have done a similarly good job at iGate too, though there are mixed reports about his performance.


Did Murthy sexually harass Araceli Roiz who was the Head of Investor Relations at iGate? If Murthy offered perks such as pay hikes or bonuses to Araceli Roiz in return of granting him sexual favours, yes it would be sexual harassment. However, it looks as if Roiz succumbed to Murthy’s request. Does consenting to the request, in other words, granting the favours that were sought, take away the fact that sexual harassment took place? I am not too sure. I guess it would depend on the facts and circumstances. A very junior employee who is forced to succumb and earns a few unwarranted pay hikes would be entitled to later on bring a claim of sexual harassment even if she had accepted such out of turn and unwarranted pay hike. An employee who is threatened with job loss and manages to keep her job on account of having granted sexual favours to a boss would definitely be entitled bring a claim of sexual harassment.

In this case, Araceli Rioz does not appear to be a very junior employee. She was Head of Investor Relations. For example, here Rioz and Murthy jointly present iGATE Corporation's First Quarter 2012 Earnings Call. More importantly, it has not been claimed that at the start of the relationship, Murthy threatened to fire Rioz if she did not give in to his demands. Of course, senior employees can also be harassed by those even more senior and so it is possible that Murthy did harass her.

What complicates the case is that Rioz is pregnant. In this day and age, people in the developed world don’t get pregnant just like that. Most pregnancies are planned and if they are unexpected, abortion is an easy option. Let’s assume Rioz was having a relationship with Murthy solely on account of his arm-twisting. Wouldn’t it be reasonable to assume that having a child would be the last thing she wanted and that she would protect herself against a pregnancy? It isn’t as if birth control pills aren’t available in liberal California.

On the other hand think of a situation where Murthy and Rioz had a consensual relationship. Murthy might have initiated it and Rioz might have gone along for a number of reasons ranging from actually liking Murthy to expecting him to grant her professional favours, in the form of pay hikes, bonuses or other perks. The two of them liked each other enough to want to have a child together. Maybe by then people in the office starting talking and Murthy had to stop giving professional favours to Rioz. Maybe he couldn’t justify to the Board of Directors more pay hikes or bonuses for Rioz. Also, it is a fact that like every other IT firm, iGate too was suffering on account of the economic downturn. There’s this report dated 30 march 2013 which says Murthy had to take a 40% cut in his own bonus because of the downturn and it’s quite possible that Rioz didn’t get the pay hike she expected. Maybe at that point the relationship soured and the couple decided to part ways. Rioz knows that Murthy has faced allegations of sexual harassment in the past. Any lawyer worth his or her salt would know that a mere claim for child maintenance will yield a lot less than a claim of sexual harassment.

If Rioz weren’t pregnant, a claim of sexual harassment would be believable, given Murthy’s past track record. However, the baby complicates matters infinitely. Even if Murthy’s initial approach was one of harassment and even if Rioz was forced to succumb to keep her job, the decision to have a baby suggests a fair degree of consent. The claim that Murthy tried to force Rioz to abort the child sounds horrendous, but actually it is not. Even if the baby was planned, when a couple decide to part ways after conception, it would not be unnatural for either of the parents to consider an abortion. Rioz does not claim that Murthy used physical force to have sex or to have an abortion. It is in fact so inconceivable that in the US of A, a man can force a woman to have an abortion against her will. Suggestions, requests, lack of support, yes. Physical force, no. According to this report, when Murthy discovered that Roiz was pregnant, he pressured Roiz to have an abortion. When she refused, he told her to leave the company, quietly, to protect his position as CEO. If the above allegation is true and it could well be true, then it would definitely warrant a claim against Murthy, but I doubt if it would count as sexual harassment. I mean, a married CEO has an affair with an employee. The employee gets pregnant. The CEO proposes an abortion. When the woman refuses, he suggests that she move on to another job so that she doesn’t embarrass him. All very selfish and nasty on the part of Murthy, but it doesn’t amount to sexual harassment within the workplace. Also, the fact remains that Murthy did not actually fire Roiz when her charges became public. In fact, she continues to be on the rolls of iGate.

Usually when a CEO has an intra-office affair, it doesn’t remain a secret for long. Murthy’s affair was no exception, according to this report. In other words, iGate’s management and board of directors must have known of it for long. Why then did they fire Murthy on the ground that he had failed to disclose his relationship? Possibly to protect themselves in the suit filed against iGate by Rioz.

Sexual harassment is a serious offence and everyone, employers, courts, the public at large, ought to take it seriously. However, the Murthy-Rioz matter semms to be more a case of a relationship gone wrong than one of sexual harassment.