When Marti Smye sold her executive coaching business to a senior-level headhunting company in 2005, she consented to sign two contracts. Through a legal clause known as “choice of law,” one agreement specified that California law would govern any disputes that arose over the Los Angeles–based Korn/Ferry’s purchase of Smye’s Florida business. But since Smye was not only selling her business to Korn/Ferry but also coming on board as an employee — who would help establish the new coaching business within the larger company — she was asked to sign an employment agreement. That contract’s “choice of law” provision stipulated that legal issues concerning Smye’s employment would be governed by Florida law.

Smye, fired from Korn/Ferry in December 2008, is now suing the company for antigay discrimination. Last month the Los Angeles superior court refused to hear her case because of the “choice of law” provision, and Smye doesn’t want to bring the case to Florida because it offers no recourse to workers terminated for being gay. Smye believes Korn/Ferry orchestrated the contracts as a cushion against a possible lawsuit.

Korn/Ferry vehemently denies both this and Smye’s accusations that an antigay animus runs through its corridors of power. Korn/Ferry wouldn’t speak on record regarding the lawsuit, but Michael Distefano, Korn/Ferry’s chief marketing officer, issued the following statement:

“The matter that we have pending with Marti Smye is, at its core, a business dispute regarding financial issues related to her departure from our company. After our business dispute developed, Marti filed a lawsuit against the company alleging discriminatory behavior. We have investigated those claims and found them to be without merit. We made a motion for summary judgment, which was granted by court, and that case was dismissed. Korn/Ferry's internal practices, codes of conduct and employee benefit programs fully support strong human rights values and practices.”

Korn/Ferry, a publicly traded company, does indeed offer domestic-partner benefits to its 2,300 employees. But Smye says the company has a culture of homophobia that became apparent before she was even hired — before coming on board, Smye’s business had a contract with Korn/Ferry, and the company invited her to a conference where she says Korn/Ferry employees talked pejoratively about a speaker because of his perceived sexuality.

Smye then came out to the corporation’s chairman and asked if her sexual orientation would be an impediment at the company.

“When I went to the chairman, he said this was a one-off, unfortunate situation that would not get in the way of my success,” Smye says. “But because of that I wanted to raise the issue that I was gay. I didn’t want any surprises; I didn’t want to be hidden.”

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