After Loss, Pao Hopes Case Helped Level the Playing Field

After deliberating since Wednesday, a San Francisco jury delivered its verdict in Silicon Valley's most closely watched trial.
Ellen Pao former junior partner at Kleiner Perkins Caufield amp Byers exits state court in San Francisco California U.S....
Ellen Pao, former junior partner at Kleiner Perkins Caufield & Byers, exits state court in San Francisco, California, U.S., on Wednesday, March 25, 2015.David Paul Morris/Bloomberg via Getty Images

A jury has decided that one-time partner Ellen Pao was not discriminated against by her former employer, storied venture capital firm Kleiner Perkins Caufield & Byers, because of her gender.

The six-man, six-woman panel today denied all of Pao's claims that Kleiner discriminated against her and had retaliated against her for complaining. Pao said she was denied promotions and was ultimately fired after reporting gender bias at the firm.

The jury deliberated for more than two days in an isolated, windowless room in San Francisco Superior Court. The five-week sex bias trial engrossed Silicon Valley and convulsed the larger tech industry, where women are still a distinct minority.

"I have told my story and thousands of people heard it," Pao said outside the courtroom after the verdict was reached. "If I've helped to level the playing field for women and minorities in VC, it was worth it."

Throughout the trial, which began more than a month ago, Pao’s attorneys sought to show that the legendary venture capital firm fostered a biased, male-dominated climate where women were passed over, put down, and ignored. Kleiner’s defense team, meanwhile, tried to show that Pao herself wasn't up to the job, and that her termination had nothing to do with her gender.

“Today’s verdict reaffirms that Ellen Pao’s claims have no legal merit," Kleiner Perkins said in an emailed statement.

Kleiner also spent much of the trial seeking to present itself as a firm at the forefront of backing women in venture capital and tech. "KPCB remains committed to supporting women in venture capital and technology both inside our firm and within our industry," the firm said after the trial.

Pao's suit consisted of four separate but related allegations. She accused Kleiner Perkins of discriminating against her based on her gender and said the firm retaliated against her after she complained. Kleiner Perkins failed to take all reasonable steps to prevent that discrimination, she said, and instead retaliated by firing her.

The jurors parsed twenty-one days of testimony to come to their decision.

In a bizarre legal hiccup, the jury returned to the courtroom earlier this afternoon saying it had reached a verdict and found against Pao on all four of her claims.

But a poll of individual jurors by Judge Harold Kahn determined that only eight had voted 'no' on Pao's fourth claim---that Kleiner had retaliated against Pao for complaining about gender bias at the firm by firing her. Nine votes are required to reach a final verdict.

As a result, the judge sent jurors back to deliberate further. After more than an hour, the jury returned and was polled again, and the final vote on the fourth claim was 9-3.

No Winners

Regardless of the verdict, the fact that the case came to trial at all was a kind of loss for Kleiner. In Silicon Valley, companies and venture capital firms craft careful public relations strategies to protect their images. But no PR spin could hide the gossip-ridden world of office politics and intrigue at the firm that emerged during weeks of testimony. Whether, for example, a private jet flight included lewd talk of the Playboy Mansion and Victoria's Secret models or not, the fact that such a question came up at all is a far cry from the picture of progressive, innovative "thought leaders" VC firms seek to project.

“Kleiner Perkins dodged a bullet, but the firm didn’t come out smelling like a rose,” says Joan Williams, a professor at University of California, Hastings College of the Law who specializes in women's issues in the workplace.

Of course, Pao didn’t come out as the “nice girl next door” either, she said. “Is she being held to a higher standard of likability? Maybe she is. It certainly didn’t help her case,” William says.

According to Williams, it’s widely known that it is easier to prove retaliation, and more difficult to prove than discrimination. “There was a lot of conflicting evidence and a lot of it came down to who you believe, and judgement,” she says. “It’s easier to assess that, if after Pao complained, Kleiner would turn against her—with comments like ‘she had a female chip on her shoulder.’”

If Pao had won the case, Williams believes, the trial would have much deeper reverberations in the industry. “That said, this case remains a game changer, even if she lost,” Williams says.

For one, some of the incidents presented in the suit and recounted during witness testimony were in line with patterns of subtle bias against women, Williams pointed out, including being asked to take notes at a meeting, walking the tightrope between being seen as “too passive” and “too harsh,” and being denied opportunities because of her pregnancy. That they’re being seen as evidence of gender bias, rather than “micro-aggressions” in an extensive gender discrimination lawsuit is a positive sign we’re making progress, according to Williams. “That will serve to focus people’s attention on them, and the need to focus on them in the workplace,” she ways.

Disruptive Human Resources

Whatever the jury's decision, the case has exposed the vulnerabilities of Silicon Valley's lax approach to human resources, said Reuel Schiller, professor of labor and employment law at UC Hastings. Kleiner acknowledged during the case, for example, that it was unable to locate a written copy of its equal opportunity employment policy after it brought in an outside investigator to look into Pao's complaints of gender bias at the firm.

"If you don’t have, frankly, more traditional ways of managing your human resources, you’re going to get into trouble," Schiller said. "You’re going to particularly get into trouble in the situaion the tech community is in right now, that there are so few women employees."

Schiller said he doubted that Pao's team would seek to exploit the jury's miscount alone as grounds for a mistrial. If she did seek an appeal, he said, it would more likely be on grounds such as the judge's instructions to the jury on how to define gender discrimination.

Pao had sought $16 million in compensatory damages, a figure that could have been much higher if the jury had found in her favor and also decided to award punitive damages.

The Jury Speaks

Lynne Hermle, Kleiner Perkins’ lead defense attorney, gave a short speech after the verdict was delivered. “I want to say it has been an extraordinary honor representing Kleiner Perkins in this case. Trials, like venture capital, are a team sport,” she said, turning to thank her legal team, who are mostly women. “We call ourselves the all-girl trial team, plus Joe.”

Two jurors elected to speak publicly. They confirmed that juror number 3 changed his vote walking from the deliberations room to the courtroom, then eventually changed it back. “We were surprised as anybody else when [the vote] went to 8-4,” said Steve Sammut, a white male juror who voted “no” on all four of Pao’s claims.

According to Sammut, what really stuck out for him was the performance reviews they looked at. In Pao’s case, he said, the areas for improvement stayed the same, whereas remarks for other Kleiner employees tended to change. He admitted that he thought Hermle was a stronger lawyer, than Alan Exelrod or Therese Lawless, Pao’s attorneys, especially during cross-examination.

When asked whether there was much talk among the jurors about the broader significance of the case for the venture capital world, Sammut said there was none. “We never talked about who was waiting for us or what it was going to do to the venture capital world in general,” he said. “We focused on this case.”

Marshalette Ramsey, an African-American woman who works as a BART manager, voted “yes” on all of Pao’s claims. Ramsey admitted she was ending the trial feeling rather emotional about it. “I’m going home to release the amount of responsibility I’ve been carrying in the last few weeks,” she said in her brief speech.

In spite of the outcome of the case, Ramsey said, she hoped it still sent a message to others who might be thinking twice about speaking out about their problems as women in the workforce. “If you think its been done to you,” she told the public, “definitely stand up.”