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Jury rules Silicon Valley firm did not discriminate

By
Richard Morgan
Published March 27, 2015, 5:27 p.m. ET

Ellen Pao lost her gender discrimination suit against Silicon Valley’s most visible venture-capital firm — but the issues she raised will still swell into a tidal wave.

Silicon Valley faces continued scrutiny from critics who point to double standards that favor men in pay and performance reviews, a bias against hiring women and an alarming lack of evolution inside high tech’s male-dominated culture.

Although Friday’s verdict cleared VC firm Kleiner Perkins Caufield & Byers of gender discrimination against Pao, two similar suits recently brought by women against Facebook and Twitter indicate the subject is by no means exhausted.

“I’m grateful for my legal team for getting me my day in court,” she said outside the courtroom. “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was well worth it.”

Pao, a Princeton and Harvard Law graduate who filed suit in May 2012, was seeking $16 million in compensatory damages, plus punitive damages.

Now 45, she joined Kleiner in 2005 as technical chief of staff for John Doerr, the senior partner who also serves as the firm’s public face.

Doerr initially mentored Pao, helping her to rise to junior investing partner.

But in deference to negative evaluations of Pao by other Kleiner partners, not to mention the firm’s “up and out” promotion philosophy, Doerr didn’t rescue her from being fired in October 2012 — five months after she had brought her sex-bias suit against the company.

The timing accounted for the strongest of the suit’s four claims against Kleiner — that Pao was fired in retaliation.

The judge presiding over the 26-day trial in San Francisco Superior Court sent the 12-member jury back into deliberations Friday afternoon to ensure it had the requisite nine votes to clear Kleiner of that charge.

The jury emerged a second time — two and a half hours after delivering its initial verdict — with the vote change necessary to give Kleiner its clean sweep.

Pao had also claimed the firm retaliated against her after she complained about discrimination but before she was fired.

Her other two claims dealt directly with discrimination: one for allegedly practicing it on the basis of gender and another for not taking reasonable steps to prevent it.

Pao’s suit lacked a smoking gun but turned on such social and professional indignities as being excluded from an all-male dinner with Al Gore and from meetings about potentially lucrative investment opportunities. Yet it served up enough salacious details to put Silicon Valley’s sexist stereotypes on display.

In one instance, a senior Kleiner partner joked to a female underling that she should have been “flattered” when an uninvited male colleague appeared at her hotel door in just a bathrobe.

In another, Pao herself acknowledged dating a colleague for six months without being informed or discerning that he was living with his wife.

“Today’s verdict reaffirms that Ellen Pao’s claims have no legal merit,” Kleiner said. “There is no question gender diversity in the workplace is an important issue. KPCB remains committed to supporting women in venture capital both inside our firm and within our industry.”