By Marisa Kendall, From The Recorder
SAN FRANCISCO — The woman whose accusations of gender discrimination against an elite venture-capital firm rattled Silicon Valley is set to go to trial this week in a case that could be worth tens of millions of dollars.
Ellen Pao, a former junior partner at Kleiner Perkins Caufield & Byers, accuses the Menlo Park firm of denying her a promotion and retaliating when she complained male partners had made inappropriate sexual advances.
Pao’s suit, describing an entrenched boys’ club culture where women were excluded from deal-making dinners, paid less and kept off prime investment funds, struck a chord that is still resonating as part of a larger discussion about opportunities for women in the male-dominated tech sector.
Traci Hinden, a San Francisco lawyer who represents employees in gender discrimination and harassment suits, said a victory for Pao, who is now interim CEO of Reddit Inc., could inspire other Silicon Valley companies to examine how they treat female employees.
“We’re seeing that women are still marginalized, still not given the same access to privileges and pay raises,” Hinden said. Kleiner Perkins, represented by an all-female trial team from Orrick, Herrington & Sutcliffe, claims Pao had trouble working with others and wasn’t promoted because she lacked the skills to be a senior partner. That means a large part of the case in San Francisco Superior Court will come down to which side’s witnesses the jury finds more credible.
Pao must testify, and Kleiner Perkins senior partner Randy Komisar is also expected to take the stand. Pao has accused Komisar of behaving inappropriately toward her at work—she says he gave her a sexual book for Valentine’s Day and asked her to dinner while his wife was away.
The trial is formally set to begin Feb. 17 but could be delayed if a judge is not available. Barring a last-minute settlement, the trial will be the first chance to glimpse evidence of how Pao and other female employees were treated by Kleiner Perkins. Aside from the firm’s early bid to push the case into arbitration, which was unsuccessful, there’s been relatively little briefing on the merits of the case and neither side has shown its hand.
“It’s all going to come out at trial,” said Pao’s lawyer, Therese Lawless of San Francisco employment firm Lawless & Lawless.
Pao, represented by Lawless and Alan Exelrod of Rudy, Exelrod, Zieff & Lowe, is a former Cravath, Swaine & Moore associate who worked at Microsoft Corp. and other technology companies before joining Kleiner Perkins as a junior partner in 2005.
Pao’s lawyers say she watched the men around her move up, while she worked for the promotion to senior partner but was passed over. Pao sued Kleiner Perkins for gender discrimination and retaliation in May 2012, and the firm fired her five months later.
Pao’s complaint describes pervasive gender discrimination at the venture capital firm. She claims female partners were excluded from male-only business events and limited in the number of board positions they were allowed to accept, unlike their male counterparts.
In 2011, her lawyers claim the firm organized two business dinners without inviting Pao or any other female employees because, as the complaint quotes one male partner saying, women would “kill the buzz.” Kleiner Perkins’ lawyers, led by Orrick’s Lynne Hermle, refute that claim, arguing that one of the dinners Pao mentions actually included male and female partners.
Pao wasn’t promoted, and ultimately was fired, because of performance issues, the defense contends.
“As Pao’s emails and [Kleiner Perkins] witness testimony demonstrates, at one time or another, Pao had conflicts with almost every [Kleiner Perkins] partner and employee,” the defense team wrote in a January filing. A Kleiner Perkins spokeswoman declined to comment.
Both sides apparently intend to use Pao’s performance reviews, the positive and the negative, to make their case to the jury.
That type of documentary evidence can be helpful, said employment attorney Melinda Riechert, managing partner of Morgan, Lewis & Bockius’ Silicon Valley office, but it’s unlikely to win the case for either side.
“People can have good reviews and still not get promoted,” Riechert said.
Pao also accused Kleiner Perkins of turning a blind eye when she complained of sexual harassment by a colleague. Pao has said she “succumbed … on two or three occasions” to sexual advances from Ajit Nazre and when she broke off the relationship, he began retaliating against her. Nazre is not expected to testify at trial.
Pao also claimed partner Komisar, who made Forbes’ list of top tech investors last year, gave her a sexually explicit book for Valentine’s Day in 2007.
Kleiner Perkins’ lawyers contend Pao and Nazre had a consensual relationship and that her interpretation of Komisar’s gift twists “facts and events in an attempt to create legal claims where none exist.” Komisar gave Pao the Book of Longing by Leonard Cohen, a critically acclaimed poetry collection that had been purchased for Pao by Komisar’s wife, they wrote.
Hermle has told the court Pao is asking for $16 million, which Pao’s lawyers haven’t confirmed. Pao also is seeking punitive damages.
In 2012, Kleiner Perkins managing partner John Doerr responded publicly to Pao’s suit, calling her allegations false and unfounded. In the three years since, the company has had little to say.
Kleiner Perkins’ lawyers had tried to force Pao’s claims into arbitration, claiming she gave her consent through the operating agreements of individual investment funds she helped manage. But San Francisco Judge Harold Kahn denied the bid in 2012 and a First District Court of Appeal panel agreed.
Since losing that battle, the Orrick team has opted to proceed quickly to trial without first seeking dismissal or summary judgment.
Lawless says that’s probably partly because the two sides disagree about nearly everything in Pao’s complaint. “There’s so many disputed issues of fact, that they probably could not possibly have prevailed in summary judgment,” Lawless said.
When Pao first filed her lawsuit, some in Silicon Valley were surprised Kleiner Perkins was the defendant, said Riechert of Morgan Lewis.
“I think everyone thought Kleiner Perkins had a pretty good reputation for having women employees and treating women well,” Riechert said.
One of only four women listed in Forbes’ top 100 tech investors is Mary Meeker—of Kleiner Perkins.
According to a 2014 study by Babson College in Massachusetts, the VC gender disparity is getting worse. The percentage of women partners in U.S. venture-capital firms dropped from 10 percent in 1999, to 6 last year, according to the report. Venture-capital firms with women partners are twice as likely to invest in companies with women on the management team, the study found.
David Goldenberg, founding partner at VLP Law Group, said women in the venture-capital firms he represents tend to be unevenly distributed throughout the company.
“There are a good number of female VCs in the more junior positions,” he said, “and not so many in the upper positions.”
Hinden, a plaintiffs attorney, said gender discrimination runs rampant through the industry.
“I had a close friend that was in investment banking and he was constantly telling me how he did a lot of his deals in the sauna and the steam room,” she said. “And I said what about the women in the firm? … He just looked at me like my hair was on fire.”
IMAGE: Ellen Pao and attorney Alan Exelrod Jason Doiy / The Recorder
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