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News - June 20, 2012

Kleiner Perkins answers sex discrimination lawsuit

by Sandy Brundage

Claiming a female employee has "twisted facts and events in an attempt to create legal claims where none exist," Kleiner Perkins Caufield & Byers filed a detailed response to a sex discrimination lawsuit on June 13 in San Francisco Superior Court.

Ellen Pao, a junior investment partner at Kleiner Perkins, filed the lawsuit on May 10 after working at the Menlo Park venture capital firm for seven years. The suit alleges that the firm discriminates against women for promotions and compensation, and retaliated against Ms. Pao after she complained about sexual harassment.

Kleiner Perkins has asked the court to seal portions of the case record related to profit-sharing agreements, and to compel Ms. Pao to resolve the issue through arbitration, which the company says she is contractually obligated to do.

But the public portions of the filing attack Ms. Pao's allegations, often presenting a point-by-point rebuttal. It flatly denies that she reported any harassment until late 2011 or early 2012. By then, according to the document, she had already hired a lawyer and was preparing to sue.

Once she did complain, according to Kleiner Perkins, it hired an independent outside investigator who interviewed 17 partners, including every female partner at the time, "provided Plaintiff multiple opportunities to provide information and documents, and, after a thorough review, concluded the Plaintiff's discrimination and retaliation complaints were without merit."

Ms. Pao started working at Kleiner Perkins in 2005 a few years after finishing an Ivy League education that included both a law degree and MBA from Harvard, according to her lawsuit. A peer with longer tenure at the firm began pressuring her for sex, she alleges, and after eight months she briefly gave in.

The lawsuit claims that after she ended the relationship he retaliated by leaving her out of business projects. According to Ms. Pao's filing, the man left the firm in 2011 after allegations made by other women were investigated.

After hearing of complaints from three administrative assistants about harassment and discrimination in 2007, she repeatedly approached upper management for help without success, according to the lawsuit. Instead Ms. Pao perceived a pattern of retaliation as she was passed over for promotion, networking events and raises, and given delayed or biased performance reviews.

In its rebuttal, Kleiner Perkins cites Ms. Pao's performance reviews, which questioned her initiative, interpersonal skills and ability to work as a team member. "Based solely on repeated and widespread performance concerns" raised by colleagues inside and outside the company, "Plaintiff did not earn the necessary support of her male and female partners for promotion," according to the filing.

Although veteran partner John Doerr posted a statement on the company's website two weeks ago that said facts would determine the outcome of the case, it may be a matter of perspective.

For example, Ms. Pao's filing says a senior partner gave her "The Book of Longing" by Leonard Cohen, and described it as filled with sexual drawings and poems. The partner then asked her out to dinner while his wife was out of town, which she found inappropriate, according to the lawsuit.

Kleiner Perkins, on the other hand, said the book was chosen by the man's wife for Ms. Pao after the junior partner gave him a book about Buddhism as a holiday gift. Leonard Cohen wrote "The Book of Longing" after a five-year stay at a Zen monastery; the firm's legal filing quotes a New York Times book review that called it "profound."

Ms. Pao's lawsuit details specific instances of gender exclusion, including a company ski trip in January 2012 and several dinners to which only male employees were invited. The host of one event reportedly said that inviting women would "kill the buzz."

Kleiner Perkins again flatly denied the allegations. "On the contrary, a dinner to which Plaintiff appears to refer to as male-only was, in fact, attended by male and female KPCB partners, and male and female entrepreneurs and leaders," the filing states.

The venture capital firm's counsel, Orrick, Herrington & Sutcliffe, has asked the court to dismiss the case. The court scheduled a management conference for Oct. 10.

Attorneys for either side were not available for comment, although Ms. Pao's eminent lawyer, Alan Exelrod, told the New York Times that they plan to fight the request for arbitration. Ms. Pao remains an employee of Kleiner Perkins, and posted on an online industry message board on June 4 that she has no plans to quit.