June 20, 2024
Karl Kroeker, co-founder of hedge fund Woodline Partners, was sued by a former employee claiming he contributed to a demeaning work culture and repeatedly made sexually inappropriate comments, and that she was fired as she grappled with postpartum depression.

By Hema Parmar | Bloomberg

Karl Kroeker, co-founder of hedge fund Woodline Partners, was sued by a former employee claiming he contributed to a demeaning work culture and repeatedly made sexually inappropriate comments, and that she was fired as she grappled with postpartum depression.

Danielle di Bari, a 32-year-old executive admin who left the firm in May, alleges in the lawsuit that Kroeker, 51, on multiple occasions proposed suggestive hypothetical questions to her and fellow EAs, and that she was fired after requesting to work remotely for an extra day a week to accommodate her postpartum depression.

“Executive admins, exclusively young women, are expected to endure bawdy jokes, derogatory and demeaning comments, and other inappropriate conduct, while supporting the predominately male portfolio managers, analysts, and traders,” the lawsuit, filed Aug. 3, said. The various instances created a culture that was hostile, intimidating, oppressive and misogynistic, it said.

Woodline is aware that a complaint was filed, its law firm, Sidley Austin, said in a statement.

“The firm treats allegations related to its employees seriously and is committed to providing a supportive and equal-opportunity workplace,” the statement added. “Woodline intends to defend itself. Generally, we do not comment further on pending litigation.”

Di Bari’s law firm said it looks “forward to vindicating her rights in court.”

The suit, filed in the Superior Court of California on Aug 3, requests a jury trial and alleges that she suffered lost past and future income, damage to her career and psychological and emotional distress. She accused the firm of discrimination, retaliation and defamation and is seeking unspecified damages. The suit was served to Woodline on Aug 15.

When Woodline opened in 2019, the San Francisco-based firm had one of the year’s biggest debuts. It managed to attract $2 billion in commitments at a time when investors were weary of the hedge fund industry’s high fees and mediocre performance. The pedigree of its founders, Citadel alumni Kroeker and Michael Rockefeller, 43, likely helped lure investors, and the firm now manages about $6 billion.

Kroeker was the only co-founder named as a defendant in the lawsuit.

Woodline has six executive admins and two more that take on hybrid EA and receptionist roles, according to the lawsuit. That all-woman team mostly consisted of EAs between the ages of 23 and 33, with the oldest being about 37, it said.

Hypothetical Questions

The lawsuit details several alleged examples of inappropriate conduct, including a number of “hypotheticals” Kroeker is accused of asking over the past three years.

At a company happy hour, for example, Kroeker asked a group of female EAs if they would rather have their boyfriend cheat in a purely physical one-night stand, or have an emotional affair lasting months, according to di Bari. In May, he took them to dinner and asked if they would pick a man who goes to the bar while they’re in labor, or one who wears fake breasts for a year to help with breastfeeding, she claimed. In both cases he asked each woman to answer, according to the lawsuit.

The suit detailed another alleged instance, after a stranger was asked to take a photo of the group, where Kroeker commented, “What would you do if we got the phone back from that guy and all of the photos were just of Gaby’s breasts?” he said, referring to di Bari’s pregnant colleague. When di Bari said he can’t speak that way to her, he responded with “Oh, am I not supposed to say that?” the suit alleges.

In April, Woodline shifted from being fully remote to mandating staff work from the office at least three days a week, according to di Bari. She made a special request to come in two days a week as she had returned from maternity leave the month prior and was experiencing depression.

She also questioned why Rockefeller, Chief Operating Officer Matthew Hooker and portfolio manager Charlton Yu were allowed to spend much of the summer working fully remotely, her suit said. Di Bari alleges that Kroeker wrote in an email that the young women were important to the hedge fund’s “brand” because “many of us are nerds and need the uplifting pep of you ladies.” Hooker and Yu weren’t named as defendants in the suit.

On May 22, in response to the firm’s request, she produced a doctor’s note supporting a modified work schedule. Three days later she was fired, she said.

When Woodline fired di Bari, according to the lawsuit, “it sent a hostile message loud and clear to the other female EAs, including at least one who was pregnant. If you challenge the misogynistic status quo or voice your own needs for pregnancy and childbirth-related conditions, Woodline Partners will fire you without regard for who you are as a woman, as a new mother, or your legal rights.”

Di Bari was 27 when she joined Woodline in April 2019 as one of the firm’s first roughly 20 staffers, the suit said.

FundFire reported di Bari’s lawsuit earlier.

The case is Danielle (Kesich) di Bari v. Woodline Partners LP, 23-608127, California Superior Court (San Francisco).

More stories like this are available on bloomberg.com

©2023 Bloomberg L.P.

>