Maria Zhang, Yahoo's top-level executive accused of sexual harassment by a former employee, has filed a defamation lawsuit against accuser Nan Shi, with the full support of the internet giant.
Zhang, senior director of engineering at Yahoo, earlier filed a cross complaint for defamation and intentional infliction of emotional distress in the Superior Court of the State of California, County of Santa Clara, a Yahoo spokesperson told IB Times UK in an emailed statement.
Earlier, China-born Shi alleged in a lawsuit filed at the same court that Zhang forced her to have oral and digital sex with her on a number of occasions in Sunnyvale, California, in return for a "bright future" at Yahoo.
"Shi made false claims that Renhui (Maria) Zhang coerced her into having sex so that Shi could extort Yahoo! Inc. for money," the complaint seen by IB Times UK reads.
"Zhang submits this Cross-Complaint for defamation and intentional infliction of emotional distress to redress the harm caused by Shi's attempt to ruin Zhang's professional and personal life for Shi's own financial gain."
The complaint alleges that Shi struggled to perform up to company expectations as a principal software development engineer, and received negative performance feedback in the third quarter of 2013.
Despite changing her technical lead, her performance in the company did not improve and her job was in serious jeopardy by March 2014.
"Realizing that consistent negative performance feedback would likely lead to the termination of her employment and the loss of unvested stock worth potentially hundreds of thousands of dollars, Shi attempted to save her job by making complaints to Yahoo's Human Resources department," the complaint said.
In March, she complained that Zhang was a demanding manager and threatened her job, but Yahoo found no evidence for the claims after an investigation. Shi did not claim during her March 2014 meeting with Yahoo's Human Resources department that she had ever been sexually harassed, according to the court filing.
Subsequently, when Shi realised that she would not receive another chance and her termination of employment was likely to be imminent, she made a claim to Yahoo's Human Resources department, that she was forced by Zhang to have sex in exchange for receiving favourable treatment at the company.
"Shi and Zhang never had sex. They never had a sexual relationship, neither forced nor consensual," the complaint said.
"Shi made the entire story up in an attempt to save her job and avoid losing hundreds of thousands of dollars in unvested Yahoo stock."
After the sexual harassment complaint, Yahoo conducted an investigation into the allegations, but Shi could not provide "a single piece of evidence."
On July 11, 2014, Yahoo finally terminated Shi's employment, which prompted her to go to the court.
Zhang has suffered severe hardship by being falsely accused of coercing Shi into having sex with her, including injury to her professional reputation, according to the complaint.
"As we previously stated, there is absolutely no basis or truth to the allegations against Maria Zhang. Maria is an exemplary Yahoo executive, and we intend to fight vigorously to clear her name," the Yahoo spokesperson said.