Ellen Pao v. Kleiner Perkins Caufield & Byers LLC and DOES 1-20 is a lawsuit filed in 2012 in San Francisco County Superior Court under the law of California by executive Ellen Pao for gender discrimination against her employer, the venture capital firm Kleiner Perkins. Overlapping with a number of studies condemning the representation of women in venture capital, the case was followed closely by reporters, advocacy groups and Silicon Valley executives. Given the tendency for similar cases to reach settlements out of court, coverage of Pao v. Kleiner Perkins described it as a landmark trial once it began in February 2015. On March 27, 2015 the jury found in favor of Kleiner Perkins on all counts.
Background
Ellen Pao
Ellen Pao is a Chinese-American woman from New Jersey. She has a bachelor's degree in electrical engineering from Princeton University, a juris doctor from Harvard Law School and an MBA from Harvard Business School.
From 1994 to 1996, Pao worked as a corporate attorney at Cravath, Swaine & Moore. In 1998, Pao worked at WebTV. Pao worked at several companies in Silicon Valley including BEA Systems as senior director, Corporate Business Development from 2001 until 2005.
In 2005 Pao joined Kleiner Perkins as technical chief of staff for John Doerr, a senior partner, a job that required degrees in engineering, law, and business, and experience in enterprise software. In 2007 she became a junior investing partner with Ted Schlein as her boss but was eventually passed over for a senior partner position. According to Pao, she had the job title of junior partner from her date of hiring7th allegation, page 4 Complaint of Pao and was promised an opportunity to move into an investing role."Ellen Pao: ‘I Wanted to Make Sure My Story Was Told’" March 10, 2015 Re/code accessed March 12, 2015 Doerr, who has expressed awareness of the gender gap at venture capital firms, mentored Pao, liberally providing feedback, but, in the end, agreed with the other senior partners who had made negative evaluations of her work at the firm. It was Pao's contention that men with similar profiles were, nevertheless, promoted.
On May 10, 2012, Pao filed a gender discrimination lawsuit against her employer alleging workplace retaliation by a married junior partner, Ajit Nazre, with whom she had an affair. She planned to continue working at the firm but left on October 1 claiming that she was terminated.Complaint of Ellen Pao Her lawyer said she was fired in retaliation for her lawsuit and the complaint was amended to add that cause of action.
Pao joined Reddit in 2013 and became interim CEO in November 2014 after Yishan Wong resigned.
Kleiner Perkins
Kleiner Perkins Caufield & Byers is a venture capital firm located in Menlo Park in Silicon Valley. The Wall Street Journal and other media have called it one of the "largest and most established" venture capital firms and it has been called "one of Silicon Valley's top venture capital providers" by Dealbook.
The firm specializes in investments in incubation and early stage companies. Since its founding in 1972, Kleiner Perkins Caufield & Byers has backed entrepreneurs in more than 500 ventures including AOL, Amazon.com, Navigenics, Citrix, Compaq, Electronic Arts, Genentech, Genomic Health, Geron Corporation, Google, Intuit, Juniper Networks, Nebula, Netscape, Sun Microsystems, Symantec, Verisign, WebMD and Zynga. KPCB focuses its global investments in three practice areas – digital, green tech and life sciences.
Although there are fewer women than men in both junior and senior positions employed by Kleiner Perkins, its gender gap is smaller than that of most other venture capital firms and its most prominent female partner, Mary Meeker, has called it "the best place to be for a woman in the business."
Representatives for Kleiner Perkins stated that they had offered Pao a five-month transition, with pay, to an operating role, and only fired her effective October 31, 2012 when she rejected the offer.Section D page 6 Trial brief Kleiner Perkins Caufield & Byers They claimed that the decision to reassign her was made for performance reasons unrelated to the lawsuit.
Causes of action The original case was filed under the California Fair Employment and Housing Act and contained three causes of action:
Employment discrimination based on gender:
Workplace retaliation:
Failure to take reasonable steps to prevent gender discrimination:
Following her termination the complaint was amended and a second count of retaliation, termination, was added. The actual damages demanded by the suit totalled $16 million. This is approximately the amount that Pao floated in a conversation with COO Eric Keller when asked what it would take to change her mind about staying at the company. Pao explained that she "wanted my payment to be enough so it was a meaningful amount to Kleiner Perkins, so they saw it would be painful to not fix problems." The plaintiff also made a plea for punitive damages."Judge Says Pao Needs to Do Better to Prove Case for Punitive Damages" Liz Gannes Re/code March 17, 2015, accessed March 18, 2015 Although Judge Harold Kahn initially leaned toward denying this motion, he approved it on March 21, 2015.
Trial The matter went to trial in late February 2015 with jury selection on Monday, February 23, and opening statements on Tuesday, February 24. The trial, lasting 24 days, resulted in a verdict for Kleiner Perkins. It was covered by the national media and elicited broad comment regarding the issues raised. The case was live blogged and tweeted, to the point that the constant coverage provided both humorous and serious feedback to lawyers and witnesses.
The trial was heard before a jury of 6 women and 6 men drawn from diverse employment and ethnic backgrounds and Judge Harold E. Kahn at San Francisco Superior Court. Kleiner Perkins was principally represented by Lynne Hermle of Orrick, Herrington & Sutcliffe. It was also supported by Jessica Perry of the same firm and by its own counsel Paul Vronsky. Pao was represented by Alan Exelrod of Rudy Exelrod Zieff & Lowe and by Therese Lawless of Lawless & Lawless.
It was a trial to a jury of 12 who, under the rules of the court, were permitted to submit written questions to witnesses. The judge was also permitted to question witnesses. Witnesses were disclosed and deposed prior to the trial and transcripts of their depositions were available to counsel for the opposing sides and could be compared to the testimony of the witness in the courtroom. There were hundreds of exhibits consisting of documents and emails which the court had audio-visual equipment to display to the witness, jury, and audience.
Plaintiff's case The plaintiff presented her case first, arguing that men were promoted ahead of women, that ideas coming from women were more quickly dismissed and that women who experienced sexual harassment received little support. Pao claimed that Ajit Nazre, the partner who initiated a sexual relationship with her, was responsible for much of this harassment. Pao said that he began excluding her from important meetings and emails after she ended the relationship. To characterize the company's response, her case explained that $22,000 was deducted from his paycheck once and that there was no strong desire to reprimand him until an outside investigation was able to link him to multiple instances of harassment. Additionally Pao said that she felt the need to move from green tech to the digital division to avoid him. Pao was asked if she objected to having Nazre's office moved to the same corridor as her own. However, she claimed that when she said "yes", the company responded by trying to move her office rather than cancelling the move of Nazre's.
It was explained that Pao sourced an investment in RPX Corporation, a company designed to fight patent trolls, which led to an IPO. While arguing that this was adequate reason for a promotion, her side disputed KPCB's rationale for keeping her off the board of directors. They argued that the policies for how many investments and how many board seats could involve junior partners were unevenly applied between women and men. Performance reviews were raised to show contradictory evaluations such as "too bold" and "too quiet". As further evidence that Pao's work for the company was not appreciated, they pointed to potential investments in Twitter and The Climate Corporation which were turned down after Pao proposed them, both of which were seen to be profitable later on.
A number of incidents were described in the plaintiff's case including a Valentine's Day gift that she considered inappropriate, a conversation in a company jet that she felt objectified women, a dinner in Al Gore's apartment to which no women were invited and a ski trip which invited one woman on a technicality. Pao stated that she did not speak out about these when they occurred because she did not want a "reputation as a complainer". Issues with her last year at Kleiner Perkins concerned a memorandum she sent on January 4, 2012 and an alleged absence of training and policies to prevent discrimination. The plaintiff argued that the defendant took several steps to cover up aspects that reflected poorly on its record of gender equality.
Defendant's case The defendant's case placed emphasis on its large ratio of women compared to other venture capital firms. An example statistic was that it had 11 female partners and a 20% female staff compared to the average of 7-11% based on studies in 2011 and 2013. A 2014 study found that this number dropped to 4% when only senior partners were considered. The defense also argued that Pao was paid more than most of her male colleagues. While salaries had previously been redacted from legal documents, the trial revealed that Pao's salary after bonuses eventually reached a peak of $560,000. They also pointed to several opportunities that were afforded to Pao including a speech coach, mentorship from John Doerr and a longer career than that of many other junior partners. To argue that Pao's firing was justified, they presented several negative performance reviews that she received and frequently described her as "entitled" and "not a team player".
Kleiner Perkins contended that Pao's job description had been mostly managerial and that limiting her involvement in investing was not a sign of discrimination. They also said that promotions to the senior partner position were rare with 20 of the 25 people previously in Pao's position also being passed over. The defense brought in emails to show that Pao expected to be fired and suggested that some of them provided evidence that she was plotting a lawsuit. They also argued over whether her acceptance of severance pay constituted a tacit approval that the company was within its rights to fire her. The package was potentially valued at $400,000 but Pao did not receive the full amount on account of finding a job within less than a year. There are also reports that she turned it down entirely. Stating that many of the plaintiff's claims were stale, KPCB's side offered some explanations for the incidents she described and alleged that she saw discrimination where none existed. They claimed that this provided further evidence that she was an unpleasant coworker.