Ex-Microsoft Executive Lathika Pai Sues Company For Rs 35.3 Crore Over ‘Constructive Dismissal’

Former Microsoft India executive and startup ecosystem veteran Lathika Pai has filed a civil lawsuit against Microsoft India, its parent company, and senior officials, seeking Rs 35.3 crore in damages. The lawsuit has moved from the Delhi High Court to a Bengaluru civil court. Pai alleges she was forced to resign due to a hostile work environment, retaliation, and procedural unfairness, which she describes as “constructive dismissal.”

Lathika Pai, known for her significant 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.

She claims she faced months of intimidation and professional isolation after an internal investigation into a flagship startup initiative she led.

The Controversial Initiative

The programme under scrutiny, “Highway to a 100 Unicorns,” was launched by Microsoft in 2019 to support early-stage startups in smaller cities through state government collaborations. In late 2019, Microsoft received anonymous allegations of vendor favoritism and financial irregularities related to the initiative. An internal probe by Microsoft’s compliance teams reportedly cleared Pai of wrongdoing, leading to her promotion in 2021.

Second Investigation And Alleged Hostility

However, a second investigation commenced in March 2024, led by U.S. law firm Morgan Lewis & Bockius. Pai alleges she was denied access to the original complaints and transcripts from the first investigation. Furthermore, a key interview in April 2024 was conducted without recording, which was against Microsoft’s stated policy. She claims her objections to this process resulted in further hostility from the company.

Pai states she was branded a “troublemaker,” removed from key forums, and her contributions were publicly ignored. Additionally, she alleges Microsoft treated her refusal to hand over her personal phone during the second inquiry as non-cooperation, despite no legal basis for this request.

Cyberbullying Incident And Bias Allegations

The lawsuit also mentions 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 fueled the scrutiny she faced.

Resignation 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 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. This case highlights growing concerns about corporate accountability, internal investigations, and the challenges faced by senior women leaders in global tech organizations.