Gender Discrimination Trial May Rock the Silicon Valley Tech Community

Interim CEO of Reddit Ellen Pao is nearing the end of her four-week trial on the gender discrimination claims she brought against her former employer, venture capital firm Kleiner Perkins.  The trial highlights the gender imbalance and dearth of women in leadership positions in the tech industry.

Pao’s claims

In her May 2012 gender discrimination complaint filed in San Francisco Superior Court, Pao alleged that Kleiner Perkins paid her less and failed to promote her as regularly as her similarly-situated male colleagues; that the firm did nothing to prevent male executives from sexually harassing her; and that the firm retaliated against her for raising concerns about this treatment to management.  Additionally, Pao alleged that the predominantly male partner group shut her out of opportunities for advancement and relegated her to a less visible role with the firm’s clients.

More broadly, Pao claimed that her experience at Kleiner Perkins was not uncommon.  The complaint suggested that there is a pattern of sexual harassment and that “at least one other investment partner and three administrative assistants, all women, complained about [the same harasser’s] behavior.”  Pao stated that the firm’s male partners regularly excluded female executives from business development events.  One such partner told Pao that women were not invited because they would “kill the buzz.”

Pao seeks $16 million in lost back pay plus punitive damages and injunctive relief in order to prevent further sexual harassment, discrimination, and retaliation at Kleiner Perkins.


The four-week trial will come to a close this Tuesday, March 24, when both sides present their closing arguments.  In order for Pao to prevail, she must persuade a 12-person jury – 6 women, 6 men – that “her gender was a substantial motivating factor in the [company’s] decision[s]” not to promote her and, ultimately, to terminate her employment.  The presiding judge, Harold Kahn, permitted jurors to submit their own questions for witnesses.  The questions were challenging, and one such query was directed at Pao: “Why did you stay and work in an environment you didn’t trust from the outset?”

On Saturday, March 21, Judge Kahn denied the defendant’s motion to prohibit punitive damages for Pao, holding that there is “sufficient evidence from which a reasonable juror could conclude that Kleiner Perkins engaged in intentional discrimination.”  This win would have been “strategicall[y] huge” for the firm, notes one prominent employment attorney.  If the jury decides that Kleiner Perkins must pay punitive damages, the firm will be required to open its books so that the jury can determine “how big a payment will suffice.”  Some expect that punitive damages could total over $100 million.

Leading up to this point, both sides have crafted vastly different narratives about Pao’s seven years with Kleiner Perkins.  The firm presented testimony that characterized Pao as someone with significant interpersonal issues – as a “problem child who frequently clashed with her peers” – and pointed to thousands of pages of emails Pao forwarded to her personal address to suggest that she was “plotting to haul the firm into court all along.”  Several women testified about their positive experiences there.  Investor Mary Meeker, nicknamed the “Queen of the Internet,” testified that the firm is “the best place to be a woman in the business.”  A Harvard Business School professor found that Kleiner Perkins employs more women in more highly placed positions than other comparable firms.

Pao’s attorneys, on the other hand, painted Kleiner Perkins as an old boy’s club, epitomical of other VC firms in Silicon Valley.  Pao was portrayed as a “champion for women” in the venture capital community.  She told the jury that she sued the firm because Kleiner Perkins “was not going to change unless [she] pushed it” and that she “couldn’t let women be at risk and treated unfairly.”  To that end, Pao presented evidence that after she ended a casual six-month relationship with a co-worker, the man endeavored to “make [her] job much more difficult” by cutting her out of meetings and emails.  Higher-level management and HR failed to confront this and other problems, she testified, because the firm is lacking in HR infrastructure.  Pao also stated that the firm removed her from an investment once she returned from a three-month maternity leave, even though she was the primary contact with the client.

In a recent poll of 500 women who work in venture capital and private equity, 65% of participants believed that Pao will win, but for “a far lesser amount” than the $16 million she has requested.

Broader implications

Bloomberg columnist Brad Stone wrote in his latest article about the Pao trial, “There are always two stories in every Big Trial: the case itself, with its conflicting sets of facts, and the wider narrative—the way those facts fit into the lives of millions of people outside the courtroom.”  Indeed, the impact of the Pao trial is far-reaching, regardless of the verdict.

The case shines light on the absence of women in the tech industry and the many different subtle, but insidious, forms of work place discrimination that women today endure.  At most large tech companies, the workforce is comprised of less than 30 percent women.  In the niche venture capital industry, only 6 percent of VC investors are women, “down from 10 percent in 1999.”  According to a Harvard Business Review study, “50 percent of women working in science, engineering, or technology will leave prematurely because of work environments they deem hostile.”

Stanford Law Professor Deborah Rhode explained in a recent New Yorker piece that the evidence presented in the Pao case “is very typical of what’s out there in Silicon Valley.”  Rhode went on to say that “there are no smoking guns; much of it is what social scientists call micro-indignities—small incidents that viewed individually may seem trivial, but when viewed cumulatively point to a practice of insensitivity and devaluation that can get in the way of work performance.”

Inherent to these “micro-indignities” are stereotypes associated with being a woman in a position of power.  Professor Joan Williams of UC Hastings, leading expert in women’s issues in the workplace, noted, “What Ellen Pao is saying is that she got caught between being seen as too masculine to be likeable, or too feminine to be competent.”  She added that, though Pao might well be impossible to work with, “this does track a common pattern of gender bias” that she sees as especially common in tech and finance.

Some women in the tech industry have stepped forward to relay their skepticism that Pao’s case will result in positive changes at firms like Kleiner Perkins.  The CEO of Tradesy, an online fashion site in which Kleiner Perkins invested, told Bloomberg that a male CEO confided in her that he “doesn’t know how to talk to female colleagues any more and that it’s become too easy to say the wrong thing.” She is concerned that the case “may make it harder for men to feel free to give women the kinds of constructive criticism that men receive regularly and that they benefit from,” she says.  The managing partner of the Silicon Valley office of Morgan Lewis shared a similar concern.  She told the same publication that she worries that men will be afraid that they risk being hauled into court if they choose to mentor women.

It remains to be seen what effect, if any, a case like Pao’s will have on the industry in the long term.  But in the short term, more women are coming forward about their experiences with gender discrimination and are using public litigation to hold tech giants like Twitter accountable.