Maria Zhang.

One week after being sued for sexual harassment by a female employee, Yahoo executive and former Seattle startup CEO Maria Zhang has filed a counter-claim against the plaintiff.

Zhang, who joined Yahoo as a senior mobile engineering director when it acquired her company, Alike, claims that allegations made by her former colleague Nan Shi are not true.

“Making such false and outrageous allegations is so unimaginable it raises the question of why anyone would resort to such extreme measure,” the suit reads. “In Shi’s case, the answer is simple: financial gain.”

Shi alleged that Zhang coerced her into having sex and later retaliated by giving Shi a poor performance review and removing her as a project lead after Shi ultimately resisted Zhang’s advances. Shi said she was put on unpaid leave and ultimately terminated after reporting the allegations of abuse to Yahoo.

yahoo-logoBut in the counter-suit, Zhang claims that she never had a sexual relationship with Shi — neither forced nor consensual. The suit notes how Shi approached Yahoo’s HR department in March 2014 and claimed that Zhang “threatened her job” — however, there was no mention of sexual harassment at the time.

The harassment accusations came one month later, according to the counter-suit, when Shi “took drastic measures to ward off her termination.” However, when Yahoo investigated the issue, the suit notes how Shi “did not have any piece of testimonial or physical evidence to corroborate her allegations.”

“After careful investigation, Yahoo concluded that there was no support for Shi’s assertion that there was ever any sexual relationship between her and Zhang — much less that there was a non-consensual sexual relationship,” the suit reads. “After giving Shi every opportunity to substantiate her outrageous allegations, and after receiving no substantiation in return, Yahoo closed its investigation.”

Zhang, a GeekWire Geek of the Week in October 2012, is countersuing for defamation and intentional infliction of emotional distress. Last week, Yahoo denied Shi’s original allegations and said it intended to “fight vigorously” to clear Zhang’s name.

Here’s the new suit in full:

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  • RobertinSeattle

    Sexual harassment lawsuits are a lot more commonplace – especially in tech companies – than most people would happen to realize. As a firsthand victim of a lawsuit against one my my companies back in the late 90’s during the last big boom, I can tell you that there’s generally more to it than meets the eye in most cases.

    We had one female employee leave her job suddenly after already taking all of her generous maternity leave only to turn around and file a sexual harassment lawsuit against my company. It was a complete shock to me as we tried to have as many women work for us as possible during a time when the industry was primarily overrun by all guy geeks.

    After wasting a lot of time and resources discussing the ins-and-outs and strategy involved with such a case, our general counsel and outside counsel strongly advised me to allow a quick settlement, much to my strong objections based on principle. I truly wanted to fight this lawsuit all the way; it was clear to all involved inside our company that we had done absolutely nothing wrong and we would likely win in court based on evidence. Period. But from a pragmatic point of view, my advisors pointed out to me that it was clearly much cheaper financially to simply let it go and pay her off just to make her go away. Even when it was blatantly obvious that this woman was extorting additional money from my company to support an extended maternity leave. I was livid but eventually gave in so that we could stay completely focused on the mission at hand.

    So this is something that every company needs to be aware of but yet never protected from with devious and greedy employees. Worse still, it raises the bar for those who are truly harassed at work and deserve protection and compensation. In Ms Zhang case, I get a real sense that she’s the victim here and hope that they can go all the way with not only the countersuit but in successfully having this woman prosecuted to the full extent of the law for extortion.

    • Matthew Reynolds

      My experience with Nan Shi at Microsoft was quite the opposite of that. She was a hardworking, talented software developer, who was quiet and not very assertive. I’ve also dealt with the kind of people you describe, and they’re usually either aggressive, and “punch above their weight” for their level, or they’re constant complainers. Nan was a heads-down software developer who didn’t whine or complain. People know that these kinds of lawsuits are career-enders if they don’t have merit, because nobody is going to hire a litigious employee.

      Frankly, I’d offer Nan a position as a software developer in a New York minute.

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