The Pao v. Kleiner Perkins Gender Discrimination Lawsuit

Pao v Kleiner Perkins Lawsuit

If you follow tech industry news (or news about high profile employment discrimination cases, like we do), you may be aware of a recent case from California that highlights what many observers believe is a deeper discrimination issue in the tech industry. In Pao v. Kleiner Perkins, a female employee of a Silicon Valley venture capital firm alleged a widespread and long-term pattern of gender discrimination that led to her being denied promotions and compensation and ultimately cost her her job. The venture capital firm defended its practices and ultimately prevailed, but the case has opened a broader discussion about the role and treatment of women in Silicon Valley and other areas. In this posting, we’ll talk specifically about the Pao case and its outcome. Next week, we’ll follow up with a broader discussion of sexual harassment and gender discrimination in Silicon Valley.

The Background of Pao v. Kleiner Perkins

The following is our understanding, interpretation and opinion of the Pao v. Kleiner Perkins matter. Ellen Pao, the plaintiff in Pao v. Kleiner Perkins, obtained degrees from Princeton as well as Harvard’s law and business schools. Before joining Kleiner Perkins Caufield & Byers, she worked for seven years in the tech industry, including jobs at Microsoft and BEA Systems. Kleiner Perkins is one of the largest venture capital firms in Silicon Valley. They’ve provided financial backing for some of the biggest names in technology, including Facebook and Google.

When a position as chief of staff for one of Kleiner Perkins’ managing partners opened up in 2005, Pao applied for and got the job. Less than a year after starting the job, Pao alleges she was pursued by a male colleague and eventually engaged in a relationship with him. According to Pao, she did not let the relationship go on very long before she broke it off. It was after she broke off the brief relationship that Pao alleged the discrimination against her began. First, according to Pao, the colleague with whom she engaged in the relationship began leaving her out of meetings, emails and other business decisions. Starting in 2007, Pao began reporting the alleged retaliation and discrimination by her colleague to her manager and other leaders of the firm. Pao alleged that despite her complaint, her male colleague was not disciplined but was eventually promoted to senior partner while she was encouraged to drop the complaint.

For the next several years, Pao says she continued to complain about the conduct of her colleague, now senior manager, whom she claimed continued to retaliate against her for breaking off their past relationship. Meanwhile, she says she started to receive poor performance reviews, which directly impacted her compensation and ability to get promoted. Apart from the continued issues with her male colleague, Pao also claimed she'd received a book of poetry as a Valentine’s gift from a senior partner that included sexual drawings and content. She also alleged that she and other female members of the firm were left out of multiple dinners involving firm partners, with one partner explaining that the women would be “buzz kills.” After years of internally reporting what she believed were discriminatory and retaliatory acts by her male colleague and the firm leadership, Pao decided to sue Kleiner Perkins in May 2012. In October of the same year, Kleiner Perkins fired Pao.

In response to Pao’s allegations, Kleiner Perkins argued that it was more committed to diversity than its fellow venture capital firms, citing statistics that showed it employed a greater proportion of women than other firms. As for Pao’s failure to be promoted, Kleiner Perkins argued she was not alone, and many other junior partners, including male partners, had also been passed over for promotion during the same time. According to Kleiner Perkins, it had given Pao a number of opportunities and tools to succeed at the firm. The firm used the performance reviews, among other evidence, to argue that Pao was a difficult co-worker who was ultimately unable to make it as a senior partner in venture capital.

Pao's Legal Claims

The following is our understanding, interpretation and opinion of the Pao v. Kleiner Perkins claims. In her lawsuit, which Pao brought in California state court, Pao claimed Kleiner Perkins violated several provisions of the California Fair Employment & Housing Act. The provisions are similar to those found under the federal Civil Rights Act and other state laws designed to protect workers from discrimination based on gender and other protected characteristics such as race, religion and ethnicity.

Specifically, Pao alleged three different, but related violations of the California law:

  1. Under California law, it is illegal for an employer to discriminate against an employee based on their gender in matters of compensation and other employment terms. According to Pao, Kleiner Perkins denied her a promotion and compensation, and ultimately fired her, because of her gender.
  2. California law also prohibits an employer from retaliating against an employee because they’ve filed a discrimination complaint. Pao claimed that she was denied a promotion, compensation and other opportunities at work because she had complained about discriminatory conduct by her male colleague and others at the firm. She also alleged that her firing was in retaliation for filing a lawsuit against Kleiner Perkins.
  3. Finally, California law requires employers to take all reasonable steps to prevent gender discrimination and harassment. According to Pao, her internal complaints of discrimination and retaliation were met with inaction at best as her male colleague was allowed to discriminate against her for years.

Based on these alleged violations, Pao sought $16 million in damages, including damages for back pay and lost future earnings. The trial began in February 2015.

The Outcome of Pao v. Kleiner Perkins

The following is our understanding, interpretation and opinion of the Pao v. Kleiner Perkins outcome.The jury in the case deliberated for two days before returning a verdict in Kleiner Perkins’ favor on all counts. Nine of the twelve jurors (the minimum required to reach a verdict in a civil case in California) believed Kleiner Perkins’ version of events, that Pao’s own performance led to her inability to get promoted and eventually her termination and that she had not been retaliated against for raising discrimination issues.

Though Pao lost, many believe her lawsuit has shined a light on a long overlooked issue in Silicon Valley and the tech industry: the underrepresentation and unequal treatment of women. We’ll talk more about these issues and the impact of Pao’s case beyond the verdict in next week’s blog post.

If you’ve been discriminated against at work because of your gender, please contact Eisenberg & Baum. We have an experienced group of employment discrimination attorneys who are ready to help you. We offer free initial consultations for gender discrimination claims and bill on a contingent fee basis, so you won’t have to pay us unless we win your case.

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