Lathika Pai, a veteran of Microsoft India and the startup ecosystem, has filed a civil lawsuit against Microsoft India, its parent company, and senior officials, seeking damages of Rs 35.3 crore. The case, which has been transferred from the Delhi High Court to a Bengaluru civil court, alleges that Pai was compelled to resign due to a hostile work environment, retaliation, and procedural unfairness, constituting what she terms “constructive dismissal.”
Pai, recognized for her contributions to India’s startup landscape and support for women-led ventures, served as Microsoft’s Country Head for Venture Capital and Private Equity Partnerships until her resignation in July 2024. She claims to have been subjected to months of intimidation and professional isolation following an internal investigation into a flagship startup initiative she led.
The “Highway to a 100 Unicorns” Initiative
The programme in question, “Highway to a 100 Unicorns,” was launched by Microsoft in 2019 to support early-stage startups in smaller cities through collaborations with state governments. In late 2019, Microsoft received anonymous allegations of vendor favouritism and financial irregularities related to the initiative.
Internal Investigations and Alleged Harassment
An internal probe by Microsoft’s compliance teams reportedly cleared Pai of wrongdoing, and she was promoted in 2021. However, a second investigation was initiated in March 2024, led by the U.S. law firm Morgan Lewis & Bockius. Pai alleges she was denied access to original complaints and transcripts from the first investigation, and that a key interview in April 2024 was conducted without recording, contrary to Microsoft’s stated policy. Her objections to this process, she claims, led to further hostility from the company.
Pai says she was labelled a “troublemaker,” removed from key forums, and her contributions were publicly ignored. She further alleges that Microsoft treated her refusal to hand over her personal phone during the second inquiry as non-cooperation, despite the lack of a legal basis.
Additional Allegations
The lawsuit also references a 2020 cyberbullying incident, for which Pai claims Microsoft promised but failed to conduct a proper forensic investigation. She further alleges that Microsoft’s leadership unfairly viewed state government partnerships with suspicion, reflecting a bias that she believes fuelled the scrutiny she faced.
Aftermath and Legal Proceedings
After nearly eight months of what she describes as harassment, Pai resigned in July 2024, citing damage to her mental health, reputation, and professional standing. She is now seeking compensation for loss of income, emotional distress, and reputational harm.
The Delhi High Court heard the matter on May 7, where Microsoft’s legal team challenged the court’s jurisdiction. The case will now be heard in Bengaluru on June 9.
Pai, who previously founded ventures like JobSkills and SonderConnect, has been a vocal advocate for inclusion and innovation in India’s startup sector. The case adds to growing concerns about corporate accountability, internal investigations, and the challenges faced by senior women leaders in global tech organisations.
