News


Jury rejects Ellen Pao's claim of gender bias by Kleiner Perkins

 

After two full days of deliberation following an almost month-long trial, a jury on Friday afternoon (March 27) found in favor of venture capital firm Kleiner Perkins Caufield and Byers in a lawsuit alleging gender discrimination brought by Ellen Pao, a former junior partner.

The jury, composed of six men and six women, found that Ms. Pao's gender was not a substantial factor in the firm's decision to deny her a promotion to senior partner. They voted 9-3 that Kleiner Perkins had not demonstrated gender bias with regard to her advancement; did not fire or fail to promote her in retaliation for the complaint; and had taken steps to prevent gender discrimination against her.

Ms. Pao filed the lawsuit in 2012. After earning both a law degree and an MBA from Harvard, as well as a degree in electrical engineering from Princeton, she joined Kleiner Perkins in 2005.

The suit alleged that the firm discriminates against women for promotions and compensation, and retaliated against her after she complained about harassment by a peer who allegedly pressured her into a brief sexual relationship.

She asked for $16 million in compensatory damages as well as an unspecified amount of punitive damages.

The case may not be over, as Ms. Pao and her attorneys have the right to appeal the verdict. She is currently working as interim CEO of Reddit.

The lawsuit detailed what Ms. Pao described as specific instances of gender exclusion, including a company ski trip in January 2012 and several dinners to which reportedly only male employees were invited.

Kleiner Perkins refuted the allegations, saying in its filed response that Ms. Pao has "twisted facts and events in an attempt to create legal claims where none exist."

Ms. Pao was fired from the firm about six months after filing the lawsuit.

In filings made before the trial started as well as arguments made in court, attorney Lynne Hermle, representing the venture capital firm, argued that Ms. Pao was not promoted because she lacked the interpersonal skills and ability to work as a team member.

During the trial, both sides offered testimony that could have swayed jurors in either direction: For example, Ms. Pao alleged that she was pressured into an affair with a married colleague, while the defense offered evidence of a consensual relationship.

The man, Ajit Nazre, was later fired in 2012 after the company investigated another woman's complaint that he had sexually harassed her. Ms. Pao initially intervened to prevent his firing, according to court testimony, while Kleiner Perkins allowed Mr. Nazre to anonymously have input into her performance reviews after the affair ended on a sour note, according to witness testimony reported by the Wall Street Journal. Mr. Nazre did not appear during the trial.

Courtroom watchers said the verdict is less important than the fact that the trial raised gender issues in Silicon Valley to a high profile, hopefully prompting change in the venture capital arena.

Ms. Pao exited the courtroom and said she appreciated the support that everyone had expressed during the trial.

"I have told my story and thousands of people have heard it. If I've helped to level the playing field for women and minorities, then the battle was worth it," she said.

Neither attorney Alan Exelrod, who led Ms. Pao's case, nor Lynne Hermle, the chief representative for Kleiner Perkins, was immediately available for comment.

Bay City News Service contributed to this report.

Comments

10 people like this
Posted by "Thought Leader"
a resident of Atherton: West Atherton
on Mar 27, 2015 at 9:44 pm

If you listened to the comments made by Pao today after the verdict, it's doubtful she'll appeal. The video also showed the KP lawyer being a rather nasty winner, talking about how the law, "like venture capital, is a team sport," clearly alluding to her defense that although Pao's investments did very well, stuff like "thought leadership" is much more important in a venture capital firm like Kleiner Perkins.

If you ask me, the most important factor in a venture capitalist is how well their investments perform. I think all the other stuff is really just pablum.

I was rather surprised at the verdict. I thought the jury would find for her, but award very modest damages. I think that would have been the correct way to deal with a situation in which some discrimination probably took place, but the plaintiff's conduct was not perfect either. But then again, there's never a perfect plaintiff or person.


8 people like this
Posted by Water
a resident of another community
on Mar 28, 2015 at 12:04 am

Water is a registered user.

Thoughtful comments, Thought Leader :-)

My takeaway is similar to yours. My overall impression is that Kao wasn't a good fit there due a mix of their gender bias and their impression that she didn't have the interpersonal skills to advance.

The problems women have here in the valley have been ignored for decades. I don't trust that this evinces the needed sea change.


7 people like this
Posted by open season
a resident of Menlo Park: Downtown
on Mar 28, 2015 at 9:59 am

After this ruling, I have to imagine all young women in Silicon Valley are going to have pretty rough going for the next few years.


8 people like this
Posted by I didn't know that
a resident of Menlo Park: Central Menlo Park
on Mar 29, 2015 at 2:07 pm

The burden of proof in our justice system is on the accuser not the accused.

"thought leader" commented "I think that would have been the correct way to deal with a situation in which some discrimination probably took place".

Water commented "My overall impression is that Kao (sic) wasn't a good fit there due a mix of their gender bias..."

A jury of six men and six women ruled that some discrimination probably DIDN'T take place and that KPCB displayed NO gender bias.

We all have an opinion when a verdict is reached but only those that worked at Kleiner know exactly what happened. In this case the jury ruled that Ms. Pao and her team failed to prove she was discriminated against.


10 people like this
Posted by pogo
a resident of Woodside: other
on Mar 29, 2015 at 4:19 pm

pogo is a registered user.

I think the VC world is, for the most part, a "boy's club." A lot of the things these guys do and say are pretty gross, demeaning and despicable. That may be no different than other industries.

That said, the real prejudice on Sand Hill Road is their bias for green. You bring winners to the firm you survive and make money. You don't and you don't.


4 people like this
Posted by majority?
a resident of Woodside: Family Farm/Hidden Valley
on Mar 29, 2015 at 4:46 pm

"A jury of six men and six women ruled that some discrimination probably DIDN'T take place and that KPCB displayed NO gender bias."

Wasn't it 8-4 that it did take place, but nine were required?


7 people like this
Posted by Roy Thiele-Sardiña
a resident of Menlo Park: Central Menlo Park
on Mar 29, 2015 at 4:51 pm

Roy Thiele-Sardiña is a registered user.

Pogo,

You are ABSOLUTELY correct. It is ONLY about the return. I know this come as a shock to many people but nearly EVERY business is about the return.

Even volunteer organization ONLY survive because someone (Business Development Officer) gets people to give them money (lets's call that "sales"), or gets grants ("sales" again) to allow their work to continue.

I have been in Venture for most of my career as both a company founder and investor and I can assure you we are ALWAYS reminded that our JOBS depend on returning assets to our investors.

In this case the jury felt that KPCB was justified in deciding that Ms. Pao could NOT give their investors a return. This happens at venture firms EVERYDAY, Partners, Associates, and General Partners leave and pursue other careers (in Ms. Pao's case an Operating Role at Reddit) in other companies.

Not everyone can be a VC, it takes a unique skill set and unique personal skills.

Roy Thiele-Sardin


10 people like this
Posted by "Thought Leader"
a resident of Atherton: West Atherton
on Mar 29, 2015 at 6:40 pm

Now wait a minute, I think we're actually all in agreement that what counts in venture capital is how much money you bring in. But Ms. Pao's investments brought in more money than those of male colleagues who did get promoted. If her personality was a disabling factor from achieving the goal of making money, it didn't.

I know KP had various rationales documented in the performance reports of why she wasn't going to work out. But isn't coming up with subjective rationale to countermand objective facts sometimes the very nature of discrimination?

Is it possible KP discriminated against Pao without intending to?


1 person likes this
Posted by pogo
a resident of Woodside: other
on Mar 29, 2015 at 7:58 pm

pogo is a registered user.

"But Ms. Pao's investments brought in more money than those of male colleagues who did get promoted."

Seriously? On what basis do you make that claim?

Just because you say you discovered Twitter or Google, doesn't mean that you did. Ms. Pao was unable to substantiate her "finds" at trial. Believe me, if she could have, she would have.


7 people like this
Posted by "Thought Leader"
a resident of Atherton: West Atherton
on Mar 29, 2015 at 8:45 pm

Pogo, many articles published about the trial noted that Pao had better investment results than the male colleagues who were promoted.

Here's one of them:

Web Link

in which Pao's witness noted that the investigator hired by KP to assess the discrimination allegations did not interview the KP employee who prepared the analysis "showing that she [Pao] and other female partners at the firm had produced better investment results than their male counterparts"

KP's lawyer handled this issue by explaining, contrary to your own opinion, which I happen to agree with, that making money for the firm really has nothing to do with getting promoted:

Web Link

“What you didn't hear from any witness was that a characteristic for promotion, a box you had to check, had to do with realizing revenue,” Hermle said to counter Pao’s lawyer’s claim that she was the only junior partner who made money for the firm at the time of promotion.

There's really no dispute that Pao made more money for the firm than the men who got promoted, just whether that was a relevant factor in the dispute.


Like this comment
Posted by I didn't know that
a resident of Menlo Park: Central Menlo Park
on Mar 30, 2015 at 7:28 am

Majority?

It was 8 - 4 when the jurors were polled PRIOR to being sent back for more deliberations.

When they returned a second time they had 9. If they hadn't there wouldn't have been a verdict.


1 person likes this
Posted by Sandy Brundage, Almanac Staff Writer
a resident of Menlo Park: Downtown
on Mar 30, 2015 at 8:25 am

The final jury votes on each count were 9-3 in favor of Kleiner Perkins.


4 people like this
Posted by majority?
a resident of Woodside: Family Farm/Hidden Valley
on Mar 30, 2015 at 9:35 am

My bad. I was misinformed.

Must have been the waters.

Thanks...


3 people like this
Posted by pogo
a resident of Woodside: other
on Mar 30, 2015 at 1:17 pm

pogo is a registered user.

"Thought Leader" -

I followed this case very closely. I was aware of Ms. Pao's assertions that she was some kind of rainmaker but also aware that there was no substantiation of those claims. It would have been remarkably easy to substantiate her claims that she sourced those companies.

Your "re/code.net" link makes no mention that of her claims much less that they were substantiated. The other link is a quote from her attorney - hardly evidence.

I stand on my assertion that her results did not warrant her elevation to partner until shown otherwise.


12 people like this
Posted by "Thought Leader"
a resident of Atherton: West Atherton
on Mar 30, 2015 at 1:44 pm

Pogo, I'm sorry to say, your analysis makes no sense. If Pao claimed to bring in more revenue than the males who were promoted, but actually didn't, it would stand to reason that the KP lawyer would have refuted that. Instead, she de facto acknowledged it, but dismissed it by arguing that there was no "box you had to check, had to do with realizing revenue" as a promotion criterion. Again, there was no dispute in this litigation that Pao brought in, at least in the short term, more revenue than the men. I suppose you can argue, as KP did, that doesn't matter in the long run, which the jury seemed to accept, and still reach your conclusion that "her results did not warrant her elevation to partner." I don't happen to agree with that conclusion, but it's an opinion, unlike the fact that Pao did bring in more money, and this was accepted and not refuted in the litigation.


1 person likes this
Posted by discriumination persists
a resident of Menlo Park: Central Menlo Park
on Mar 30, 2015 at 2:36 pm

It's a sad day when it's claimed that revenue production is the only thing that matters to firms. I'm thankful some do care about the work environment because that often enhances the ability of individuals and the entire firm to do their best. When women are subject to subtle discrimination, possibly because their behavior isn't exactly what men think it ought to be, everyone loses. I do not think Pao was a very likable person but it appears that men who were just as unlikable got ahead and she didn't. Did KP's behavior warrant Pao winning the lawsuit and $16 million? Maybe not, but please do not claim that there was no discrimination at all. If Pao's lawsuit makes individuals and firms think harder about how each employee is treated, then she helped us all.


9 people like this
Posted by Finance Female
a resident of Portola Valley: Central Portola Valley
on Mar 30, 2015 at 4:23 pm

While Ms. Pao's case was not solid and she was an imperfect plaintiff, the case does raise the all-important question of why there aren't more women represented in venture capital.
It is obvious to me that there are subtle ways this environment is unfriendly to women and women seek careers elsewhere (which is exactly how the mens' club would like it).
While the "clubbiness" may persist for another generation or 2, big picture, these firms are missing out on many talented and hard working women who could make tremendous contributions. It is a lost opportunity that for all their brilliance, the big VCs cannot seem to do the math on. Maybe they aren't so smart after all....



3 people like this
Posted by pogo
a resident of Woodside: other
on Mar 30, 2015 at 5:29 pm

pogo is a registered user.

Let me be repeat my earlier comment that (a) VCs are a "boy's club" and (b) the real prejudice is to green (money).

Small point of clarification - it's not "revenue" that they seek. It's capital gains. An investment's revenue seems to have little to do with capital gains today.

With regard to Pao's sourcing deals, there was no evidence that she outperformed her male counterparts except one claim - somewhat self-serving - by another party (Trae Vassalo) who also claimed gender discrimination when she did not make partner at KP.

Again, there was no evidence at either link and no evidence weas presented at trial. If Pao could prove she outsourced her male counterparts - and that's not difficult to demonstrate - she certainly would have.

And I agree with Finance Female that personalities play a huge part in these decisions. Don't they everywhere?


1 person likes this
Posted by pogo
a resident of Woodside: other
on Mar 30, 2015 at 5:31 pm

pogo is a registered user.

Whoops. Sorry, I meant that I agreed with the point made by discriumination persists.


1 person likes this
Posted by I didn't know that
a resident of Menlo Park: Central Menlo Park
on Mar 31, 2015 at 9:34 am

Finance Female writes "While the 'clubbiness' may persist for another generation or 2, big picture, these firms are missing out on many talented and hard working women who could make tremendous contributions" and she is right.

Change takes time and while Venture Capital was almost 100% male at one time more females are working and contributing at these firms than ever before. That trend will continue.

The same thing happened in the nursing 'club'. At one time nursing was almost 100% female and nursing colleges actually refused entrance to men. Since 1970 the amount of male nurses has tripled according to CBS News.

Web Link

As of 2013 women still outnumber men by 10 - 1 in the nursing field but more men are working and contributing as nurses than ever before. This trend will continue as well.

Change takes time.


6 people like this
Posted by pogo
a resident of Woodside: other
on Mar 31, 2015 at 11:44 am

pogo is a registered user.

Interesting take on Ms. Pao from a woman who had an interesting professional interaction with her and why her suit was "doomed from the start."

Web Link

The article concludes with this caution...

"Pao deserves credit for catching America’s attention. But if we expect to make real progress, we’d better hope for more effective activists than Pao could ever be."


2 people like this
Posted by majority?
a resident of Woodside: Family Farm/Hidden Valley
on Mar 31, 2015 at 1:02 pm

"Change takes time"

Particularly for those who subscribe to the mantra: "Change takes time"


5 people like this
Posted by Proof Positive
a resident of Menlo Park: Linfield Oaks
on Mar 31, 2015 at 1:46 pm

Bias in Silicon Valley??! If you find that the least bit hard to believe then these clueless comments prove it. Roy, with all due respect for your accomplishments, how would you know in a million years what it's like to try to bring in the big bucks when people are looking up your skirt?

How many of the women on the jury ever worked in Venture Cap? How many ever made over $100,000 a year? How about the men? And how about the fact that Ms. Pao has moved on to a very lucrative high-profile job so she's not exactly licking her wounds. No wonder they regarded her as a "Woman Scorned". Even in this day and age, high-performing women make people uncomfortable.

Regardless of the formal decision, Kleiner Perkins has been given a well-deserved black eye and shown to the world that Venture Capital firms are male-dominated testosterone clubs that sideline women by omission from the frat house. If you're doing any business at an all-male golf outing where one of the team members isn't welcome then you are guilty. Ms. Pao may not have brought in as much money as some of her male counterparts but if so it's because she didn't have the same access as they did.

The outcome of this case didn't make it harder for other women -- it's already discriminatory and it will take continued public exposure for that to ever change. Ellen Pao just took the first step by outing the dirty little secret.


2 people like this
Posted by I didn't know that
a resident of Menlo Park: Central Menlo Park
on Mar 31, 2015 at 3:15 pm

Proof Positive writes "Regardless of the formal decision, Kleiner Perkins has been given a well-deserved black eye..."

That's the hard part about these high-profile accusations, as Proof Positive writes, regardless of the verdict that is reached reputations are scarred. And if someone wants to give you a black eye, whether the claim is true or not, you can't unring the bell.

At least Kleiner Perkins got their day in court. Lots of damage can be done by the accusation alone.

Web Link


Like this comment
Posted by Alan
a resident of Menlo Park: Belle Haven
on Mar 31, 2015 at 4:41 pm

Alan is a registered user.

This just causes me to shrug; not because I think there wasn't discrimination - I really don't know - or, if there was, that it would be acceptable - it wouldn't be. Rather, it's this implied notion that somehow, the ultimate in success is clawing your way up through the rat race to the top. I'm not convinced; that's a battle for other people - I really don't find it that important, whatever gender someone may be.


2 people like this
Posted by Michael G. Stogner
a resident of another community
on Apr 1, 2015 at 11:02 am

Great Full page ad in yesterdays Palo Alto Daily Post.

Thanks Ellen


2 people like this
Posted by I didn't know that
a resident of Menlo Park: Central Menlo Park
on Apr 2, 2015 at 8:00 am

Mr. Stogner:

A similar ad appeared in the LA Times purchased by Portia de Rossi.


1 person likes this
Posted by War on Women
a resident of Menlo Park: other
on Apr 2, 2015 at 8:48 am

Proof Positive,

I do agree with you that "high-performing women make people uncomfortable." Just look at the smear campaign that the California Democratic Party launched against Meg Whitman in the 2010 Gubernatorial campaign. Meg Whitman, the paradigm of a high-performing woman, is far better qualified than Jerry Brown to be Governor in every meaningful way. She knows, breathes, and lives fiscal responsibility and knows how to get things done. Jerry Brown just knows how to tax and spend. She makes money; he spends money. Jerry Brown is the principal reason that California's general obligation bond rating is aA3. Meanwhile South Carlina under the leadership of Female Republican Governor Nikki Haley has a AAA general obligation Bond rating.

Notice how the Democratic Party incessantly talks about the Republican Party's war on women when it has waged a far more effective war on women.


Sorry, but further commenting on this topic has been closed.

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