Anti-Harassment Policy and the Startup Labor Market

This paper examines how anti-harassment legal reforms that weaken non-disclosure agreements (NDAs) in cases of workplace sexual harassment affect startups' hiring and organizational decisions. Using a staggered difference-indifferences design and LinkedIn data on over 80,000 U.S. venture-capital-backed startups from 2014-2022, we find that NDA reforms, although intended for employee protection, reduce female hiring by about 7%, with effects concentrated among junior women, who are statistically more prone to sexual harassment, and in small or male-dominated startups. The results apply to both the intensive and extensive margins of hiring female workers. Treated entrepreneurial firms also witness more departures of male managers, promote more women, and receive less VC funding. These results suggest that while NDA-weakening laws increase firms' perceived legal risk and reduce female hiring, they also trigger internal restructuring that promotes women's advancement into leadership and may, over time, foster more accountable and inclusive organizational cultures.

Keywords: JEL classification: G24, G38, H25, L26

Suggested Citation: Suggested Citation

Chen, Jun and Ma, Song and Zhang, Feng, Anti-Harassment Policy and the Startup Labor Market (November 12, 2025). SMU Cox School of Business Research Paper No. 25-32, Available at SSRN: https://ssrn.com/abstract=5740282 or http://dx.doi.org/10.2139/ssrn.5740282