PayPal Faces Lawsuit Alleging Racial Bias in Funding Program
PayPal has been hit with a lawsuit by Nisha Desai, an Asian American businesswoman and founder of New York-based venture capital firm Andav Capital. Desai alleges that the company engaged in racial discrimination by restricting access to a $535 million investment program to Black and Hispanic applicants, ultimately costing her millions in potential funding.
Allegations of Discrimination
The lawsuit, filed in Manhattan federal court, accuses PayPal of violating several anti-discrimination laws, including:
Section 1981 of the Civil Rights Act of 1866, which prohibits racial bias in contracting.
Title VI of the Civil Rights Act of 1964, which bars federal funding recipients from engaging in racial discrimination.
New York state and city human rights laws.
Desai claims she spent six weeks pursuing funding through PayPal’s program, announced in June 2020 to address economic inequality and support minority-owned businesses. Despite her qualifications as a minority entrepreneur, she alleges PayPal stopped communicating and later invested $100 million in 19 venture capital firms led by Black and Hispanic individuals.
“Wrong Kind of Minority”
In her complaint, Desai, a daughter of immigrant parents raised in the Deep South, said she was told by PayPal that Asian Americans were ineligible for funding. “To PayPal and its executives, Asian Americans might be minorities, but they’re the wrong kind of minority,” the lawsuit states.
Legal and Broader Implications
Desai seeks unspecified damages and an injunction to prevent PayPal from considering race and ethnicity in its investment program. The case is part of a broader conservative effort to challenge corporate diversity, equity, and inclusion (DEI) initiatives.
The lawsuit follows a March 2023 ruling in which a federal appeals court dismissed a similar case against Pfizer. In that case, the advocacy group Do No Harm was found to lack standing because it could not identify a directly harmed member. Desai’s legal representation, Consovoy McCarthy, is the same firm that argued the Pfizer case and frequently champions conservative causes.
PayPal’s Response
PayPal has declined to comment on the lawsuit, citing pending litigation. The company’s investment program, launched during the global racial reckoning of 2020, aimed to address systemic inequities in access to capital for historically marginalized communities.
Source : Swifteradio.com
