Ellen Pao verdict: No gender bias or retaliation by Kleiner Perkins

Ellen Pao, left, leaves court with her attorney Therese Lawless during the trial. She was suing her former employer, Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, alleging gender discrimination.

March 27, 2015 4:45 PM PT

Reporting From SAN FRANCISCO — SAN FRANCISCO — A civil jury on Friday returned a verdict in the high-profile Ellen Pao gender discrimination case, finding that powerful venture capital firm Kleiner Perkins Caufield & Byers did not discriminate against her because of her gender and did not retaliate when she protested her treatment.

The jury of six men and six women deliberated for three days after a five-week trial that captivated the tech world and highlighted many of the gender bias issues facing women in the heavily male industry.

The decision, closely followed around the world, disappointed those who have condemned Silicon Valley, and the tech industry in general, for its lack of workforce diversity.

“Men in VC firms are breathing a sigh of relief and women in tech are feeling defeated,” said Melinda Briana Epler, chief executive of Change Catalyst, a San Francisco organization that supports female entrepreneurs. “A lot of hearts clearly sank after hearing the verdict.”

Some, however, wonder whether too many hopes were resting on the Pao trial.

“We can infer from this vote that the jury believed Kleiner Perkins’ defense that she was a nonperformer and that the episodes of derogatory behavior by men toward women wasn’t enough to explain why she didn’t excel,” said Debra Katz, an employment attorney with Katz, Marshall & Banks. “In a sink-or-swim environment, she sunk... This is a disappointing result because it clearly emboldens companies to maintain glass ceilings with impunity.”

Though the issues raised in the Pao trial are not new, the verdict comes at a time of rapid economic expansion for technology companies. Firms such as Google, Facebook, Apple and Intel recently began to voluntarily release statistics that show an overwhelming preference in the tech industry for hiring white and Asian males.

Shortly after the verdict was read in San Francisco Superior Court, Pao hurriedly exited the courtroom and spoke to reporters outside.

“I’m grateful for my legal team for getting me my day in court. And to everyone around the world, male and female, who reached out to express support in so many different ways and to tell me that my story is their story, too,” Pao, flanked by her lawyers, said. “If I’ve helped to level the playing field for women and minorities in venture capital, then the battle was worth it.”

Although it initially appeared the verdict was a clean and sweeping victory for Kleiner Perkins, Judge Harold Kahn ordered jurors back into deliberations after discovering they did not meet the required nine votes needed on one of the claims.

The holdup centered on the final of four claims that Pao, a former junior partner, made against the firm: that it fired her in retaliation because she protested — via conversations, a memorandum and her 2012 lawsuit — the alleged gender discrimination. That claim initially received only eight “no” votes.

After an additional two and a half hours of deliberations, one juror switched sides on the fourth claim and a verdict was recorded.

Afterward, Kleiner Perkins released a statement saying the verdict “reaffirms that Ellen Pao’s claims have no legal merit.”

“There is no question gender diversity in the workplace is an important issue,” the Menlo Park, Calif., firm said. “KPCB remains committed to supporting women in venture capital and technology both inside our firm and within our industry.”

After the ruling was read, jurors said the final decision was not an easy one.

“We looked at it over and over again and nit-picked to come up with what we thought was the fairest verdict,” said Marshalette Ramsey, 41, a juror who found for Pao on all four claims. “Obviously it doesn’t go everybody’s way, but we did the best we could with the information we had.”

Another juror, who declined to provide his name and supported Kleiner Perkins on all four claims, said it was “one of the most difficult decisions I have ever made, without a doubt.”

Legal experts and tech industry insiders say the issues raised will ripple through the industry. Many companies have begun to examine and reform their hiring and promotion practices. Already, gender discrimination lawsuits have been filed against Facebook and Twitter.

“The curtain has been pulled back, providing a rare glimpse into the lack of equal employment opportunities for women in Silicon Valley,” said Felicia Medina, managing partner of the San Francisco office of Sanford Heisler Kimpel. “Very few gender discrimination cases actually make it to trial, and other women who have experienced discrimination will hopefully be influenced to come forward.”

Pao, 45, filed her lawsuit in 2012 and was fired five months later. In court, her lawyers argued that her termination was done in retaliation for speaking up about her ill treatment and introduced evidence, including performance evaluations before and after the suit was filed, to prove that she had been a deserving and strong employee.

Now interim chief executive of Reddit, Pao had been seeking $16 million in compensatory damages and up to $144 million in punitive damages.

Throughout the trial, Kleiner Perkins contended that Pao was an underperforming, greedy, disgruntled former employee who wasn’t cut out to be a venture capitalist.

Pao’s lawyers exposed details of workplace trysts, all-male outings, porn talk and alleged routine harassment at Kleiner Perkins intended to show a pattern of inappropriate and illegal behavior that fast-tracked men at the expense of more deserving women.

For many, those details will continue to reverberate.

“Ellen Pao, if nothing else, has opened our eyes,” said juror Ramsey.

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