PayPal has been sued by an Asian-American businesswoman who accused the digital payments company of racial bias for restricting part of a $535 million investment program to black and Hispanic applicants, costing her millions of dollars.
Thursday’s complaint by Nisha Desai and her New York-based venture capital firm Andav Capital is part of a growing push among some conservatives to limit diversity, equality and inclusion initiatives in corporate America.
Born and raised by immigrant parents in the Deep South, Desai thought she was a good fit for PayPal’s investment program, which the San Jose, California-based company announced in June 2020 to support black-owned and operated businesses. of minorities and to help address economic inequality.
Desai said she spent 1-1/2 months seeking funding before PayPal stopped communicating, even though the company invested $100 million in 19 venture capital firms led by blacks and Hispanics.
She said that PayPal has told many other businesswomen that they were not suitable for financing because of their Asian background.
“To PayPal and its executives, Asian Americans may be a minority, but they are the wrong kind of minority,” according to the complaint in Manhattan federal court.
PayPal declined to comment, saying it does not discuss pending litigation.
Desai accused PayPal of violating Section 1981 of the Civil Rights Act of 1866, which prohibits racial bias in hiring; Title VI of the Civil Rights Act of 1964, which prohibits recipients of federal funds from allowing racial discrimination, and New York State and City human rights laws.
She is seeking unspecified damages and to stop PayPal from considering race and ethnicity in its investment program.
Desai sued after a federal appeals court in Manhattan said last March that the advocacy group Do No Harm lacked standing to pursue a similar case against drugmaker Pfizer over a scholarship program for blacks, Hispanics and Native Americans because did not identify a member that was damaged.
Desai is represented by Consovoy McCarthy, who represented Do No Harm and often advocates for conservative causes.
The law firm did not immediately respond to requests for comment.
The case is Andav Capital et al v. PayPal Holdings Inc et al, US District Court, Southern District of New York, No. 25-00033.
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