Ellen Pao: A Postmortem on Tech's Biggest Gender Discrimination Case

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Ellen Pao: A Postmortem on Tech's Biggest Gender Discrimination Case

In what can sometimes be an echo chamber of discontent, a former Silicon Valley venture capitalist made a big splash with a discrimination lawsuit that brought attention to gender inequality in the tech world. Ellen Pao, now Reddit’s interim chief executive, brought charges against her former employer Kleiner Perkins Caufield Byers (KPCB) for $16 million in damages in 2012.

In the suit, which went to court in February, Pao alleged systematic gender discrimination against herself and other female staff. A junior partner at the time, Pao said she was passed up for several promotions, received lower pay than her male counterparts, and was manipulated into an intra-office affair that resulted in backlash including poor performance reviews and eventual firing. In April, a San Francisco Superior Court ruled in favor of KPCB, finding the firm not liable for all discrimination claims.

The verdict upset many people but seemed to shock few in a climate where most women have experienced some kind of discrimination or harassment, and these issues are hot topics. Attorney Rebecca Eisenberg, founder of Private Client Legal Services and a close friend of Pao’s from Harvard Law School, said the verdict was further evidence of bias in an innovative industry that refuses to change its thinking about gender.

“It’s disappointing that tech isn’t revolutionary when it comes to gender and discrimination. It’s disappointing, but not that surprising given how deeply ingrained in our culture sexism truly is,” Eisenberg said. “Ellen really didn’t want to sue, she sued because she wasn’t getting any recourse through non-suing behavior. I think she was hoping to settle and I’m really surprised they didn’t.”

Ellen Pao’s case seemed to highlight all the major issues around being a female in the tech industry, though it might have resonated more if she worked in a Big Name company like Google or Twitter. Still, women across tech sectors feel like the decks are stacked against them, said Allyson Kapin, founder of the Women Who Tech telesummit. A mere 7 percent of investor money goes to women-led startups, even though those ventures have 35 percent more return on investment than tech companies founded by men.

At trial, Pao said she experienced similar discrimination and asserted that KPCB’ female employees were not able to find sponsors for their investments and junior partners could not push an investment without a sponsor. Pao’s complaint also stated that three men were promoted instead of her, despite her performance record and multiple degrees from Harvard and Princeton.

Eisenberg (who was not involved with the trial) was shocked by several of the court proceedings, which included keeping compensation numbers for male KPCB employees off the table. The Palo Alto, Calif.-based attorney surmised that the verdict might have been different if Pao v. Kleiner Perkins was a judge-led verdict instead of a jury trial; the jury was made to not like Pao, Eisenberg said.

“If the jury would not like Ellen, they would not find in Ellen’s favor. The defense had both sexism and racism going for them,” Eisenberg said, noting that Pao was described as both too pushy and bossy, and too meek and docile. “I think that juries often reflect kind of a cultural view of a situation. [Juries may think that] there are no women who are general partners [at venture capital firms], so it must because they don’t deserve it.”

The verdict came down after 72 hours of deliberation and was a big victory for KPCB attorney Lynne Hermle. Eisenberg speculated that Hermle’s win may encourage other VC companies to staff women on their legal teams in the event of future discrimination suits whi ch would, perhaps ironically, increase job opportunities for women.

Pao racked up $972,815 in witness fees, deposition, and court reporter costs with her former employer, the New York Times reported. Kleiner Perkins offered to settle with Pao for $964,502 in November and, as a result of that offer, can now ask for reimbursement of witness fees. The company offered to forget the bill if Pao promises to not pursue the case any further; Pao has not publically announced whether the plans to appeal the ruling.

“A million dollars is a lot of money; whatever she decides I’m not going to judge her,” Eisenberg said. “One of the things that has always been extremely important to Ellen is being able to talk about this. One of things that was really hard for her was while going through litigation was she couldn’t talk openly about what was going on.”

The impact of Pao v. Kleiner Perkins has yet to be seen, though high profile women in the industry have been quoted as identifying with Pao’s struggles. Facebook COO Sheryl Sandberg told Bloomberg Television that she saw herself in the case and acknowledged the challenges women face in the tech world. Whether or not Sandberg’s statements effect change at Facebook is another question.

In what could be true feelings or PR spin, Hermle told The Recorder, “This is the right issue and the right time, but the wrong case.” Eisenberg drew parallels between school integration in the 1950s and 60s and gay marriage, adding that the only way to change gender discrimination is to forcibly change behaviors.

“I think that everybody has to do everything. A lawsuit in itself isn’t enough and one lawsuit isn’t enough; there has to be hundreds of lawsuits,” Eisenberg said, adding that “women need to lean in, but not too much” to work within the system if they can.

Gender equality also requires executives who model “good behavior” such as Salesforce CEO Mark Benioff, who announced that he would review Salesforce salaries in April and award raises to women who were making less than their male colleagues.

Kapin said she believes the outrage around Pao’s case and discrimination in Silicon Valley’s will force companies to review internal culture and address issues of inclusivity. “I also think that we will see a rise in women Angel and VC investors who have a particular interest in funding women-led startups because they know that there is a lot of money to be made in this untapped market,” she added.

Pao was fortunate to be able to take a career risk with this case, Eisenberg noted, and she will keep advocating for feminism, gender and racial equality.

“On behalf of people who can’t fight for complicated reasons, those of us who are blessed and fortunate enough to take risks must for those who can’t,” she said. “We win we lose we keep going…we all face a lot of setbacks. We all have to keep trying because if we don’t who will?”

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