MAPLEWOOD/SOUTH ORANGE, NJ — A Columbia High School graduate recently lost a landmark gender-discrimination lawsuit against her former employer, noted venture capital firm Kleiner Perkins Caufield & Byers, following a trial in San Francisco that lasted nearly a month and attracted national media attention.
Ellen Pao, CHS Class of 1987, lost her suit claiming that she was not promoted from her position of junior partner to senior partner due to her gender. Pao also alleged that Kleiner Perkins retaliated against her for repeatedly complaining about gender discrimination, did not prevent such discrimination and eventually fired her for suing over it. She asked for $16 million in compensatory damages plus additional punitive damages.
Kleiner Perkins, which developed its reputation as one of the world’s premiere venture capital firms with early investments in companies like Google and Amazon, argued in its response trial brief that Pao’s failure to be promoted was caused by her own poor track record of interpersonal conflict with co-workers accumulated over virtually her entire seven-year stint with the firm. It further said that she only complained of discrimination once during that time, just a few months before filing her lawsuit on May 10, 2012.
Additionally, Kleiner Perkins claimed it did not outright terminate her on Oct. 1, 2012, as she said, but offered to keep her on the payroll for six months and give her $200,000 in severance pay if she had not found another job in that time. It said that it was only after Pao immediately announced publicly that she’d been fired that Kleiner Perkins rescinded its offer, instead moving her termination date up to Oct. 31, but still paying her a lump sum for the next five months and a bonus.
In the end, the 12-person jury sided with Kleiner Perkins by rejecting all four of Pao’s complaints on March 27. It was only the fourth complaint — regarding her termination — that resulted in some controversy when the 8-4 juror vote failed to meet the 75 percent threshold for a decision required in civil cases. After two hours of further deliberation, the jury again sided 9-3 with Kleiner Perkins on the fourth complaint.
Though Pao ended up losing the case, many of her supporters are taking solace in the fact that her fight raised awareness of the difficulties women face working in venture capital, an industry notoriously dominated by men. In fact, Pao issued a statement following the verdict indicating that she was happy if her lawsuit helped other people facing similar struggles in their professional lives.
“If I have helped to level the playing field for women and minorities in venture capital, then the battle was worth it,” Pao said.
On the other hand, Kleiner Perkins maintained in the face of victory that it never discriminated against Pao or any of its employees. In a statement, it said that it would continue to ensure equality moving forward.
“There is no question gender diversity in the workplace is an important issue,” the partners of Kleiner Perkins said. “KPCB remains committed to supporting women in venture capital and technology both inside our firm and within our industry.”
The 24-day trial received much media scrutiny due in large part to the salacious allegations Pao made against her former employer in her complaint and during the trial. Among them, she claimed a co-worker used his authority to retaliate against her after she ended their relationship upon learning that he was not separated from his wife. She also said another partner made sexual advances toward her and then used his influence to hurt her career when she refused him, using measures such as giving her bad performance reviews. Her complaints, she argued, either went ignored or were investigated in a way antagonistic to her.
Additionally, Pao claimed she was deliberately excluded from important business meetings and dinners only attended by men; was not offered a board seat at the RPX Corporation, despite the fact that she had worked extensively with the patent risk management company; and was refused a promotion at the same time three male employees — who were at the firm for shorter periods of time — received them.
And that was not all. According to Pao, women in general at the firm were routinely passed over for promotions, did not receive support in the event of sexual harassment and were only allowed to serve on one board of directors while men could serve on several. At the trial, it was mentioned that Kleiner Perkins only has 11 female partners, with just 20 percent of its staff made up of women.
But that ratio is much better than at other venture capital firms, which are typically 7 to 11 percent female, Kleiner Perkins argued at the trial. Mary Meeker, a partner at the firm, testified that Kleiner Perkins was the best place for a woman to work in the industry.
Kleiner Perkins also claimed that Pao was actually making more money than many of her male co-workers during her time with the firm. And it said her lack of promotion was not because of gender discrimination, but her reputation for not getting along with co-workers, which was exemplified by several comments from internal and external performance reviews included in its complaint. She did not improve, which it said resulted in her being asked to transition out of the firm.
She would have even been let go sooner, Kleiner Perkins said, had not legendary venture capitalist John Doerr — who had hired Pao and recommended her for the prestigious Crown Fellowship — urged the other partners to give her another year to improve.
Though things did not end well for her at Kleiner Perkins, Pao has already landed on her feet, scoring the position of interim chief executive officer of the social news site Reddit. It is the latest in a long list of achievements she has earned since graduating from CHS. After leaving her hometown of Maplewood, Pao garnered degrees from Princeton University, Harvard Law School and Harvard Business School. Before entering the venture capital world, she worked as a corporate attorney at the prestigious Cravath, Swaine & Moore law firm and served as senior director of corporate business development at BEA Systems, among positions at other Silicon Valley companies.