Daily Journal, March 30, 2015 – Courtroom Defeat in Gender Discrimination Case May Still Make Waves

Posted March 30th, 2015.

By Phil Johnson and Laura Hautala

Daily Journal Staff Writers

SAN FRANCISCO – Despite not getting what she wanted to in the courtroom, Ellen Pao’s complaint will have an impact that will echo across the employment law realm, attorneys say.

Her defeat won’t mean fewer complaints of discrimination, they said, and may prompt companies to review their human resources practices to make sure their hiring and promotion decisions are legally defensible.

But Pao’s lawsuit was rejected by a San Francisco jury, which decided against her claims of gender discrimination and retaliation against venture capital giant Kleiner Perkins Caufield & Byers Friday after a trial that prompted lawyers and the media to intently discuss the climate of Silicon Valley workplaces.

Lynne C. Hermle, an Orrick, Herrington & Sutcliffe LLP partner who represents Kleiner Perkins, consistently portrayed Pao as a junior partner who failed because of her own shortcomings as an investor and an inflated opinion of herself that caused regular clashes with colleagues.

“Ellen Pao’s failure as an investing partner had nothing to do with her gender,” Hermle told the jury in closing arguments Tuesday.

Hermle’s argument resonated with juror Steve Sammut, a 62-year-old manufacturer’s representative who cited the consistency of the criticism by Kleiner Perkins supervisors of Pao. “I thought [Pao] was pushy for her agenda,” he said.

Douglas J. Farmer, a shareholder at Ogletree, Deakins, Nash, Smoak & Stewart PC who represents employers and is not involved in the case, said this was a successful tactic.

Pao’s assertive personality and conflicts with co-workers ultimately made it too difficult for her attorneys to portray her as a “victim,” he said. A different plaintiff who was considered more likeable might have prevailed on the claims in very similar circumstances, he said.

The verdict was not unanimous, and the jury was sent back for further deliberations after only eight of the 12 jurors – not the nine required for a verdict – agreed that Kleiner Perkins did not fire Pao because she filed the lawsuit and previously complained in writing about her treatment.

But by the end of Friday, one holdout ended up siding with the venture capital firm.

Sammut and a juror who sided with Pao, Marshalette Ramsey, agreed the jury was divided. Ramsey, however, “wasn’t seeing differences huge enough on her performance to leave Ellen Pao behind.”

A Kleiner Perkins spokeswoman hailed the jury’s decision. “Today’s verdict reaffirms that Ellen Pao’s claims have no legal merit,” the company said in a prepared statement. “We are grateful to the jury for its careful examination of the facts.”Â

But regardless of the result, the case has made waves.

“It’s certainly a good thing to have people talking about those issues,” said Xinying Valerian, an employment law attorney who represents workers. “Kudos to Ms. Pao for bringing her experiences into the discourse.”

Valerian, who practices at Sanford Heisler Kimpel LLP, said she thought employers would take note of the case. “That’s our hope,” she said. “That companies that care about image and about diversity in their ranks have probably already taken lessons.”

Farmer said the case would encourage companies to avoid discrimination and to document all their reasons for making decisions on hiring, promotions and firing.

“I think employers still have to be cautious,” he said. “Facts like this in a different scenario could come across with a different verdict.”

Pao’s attorneys, Alan B. Exelrod – a partner at Rudy, Exelrod, Zieff & Lowe, and Therese M. Lawless of Lawless & Lawless – argued that she was passed over for promotions despite outperforming her male peers, and retaliated for complaining about gender relations at the firm.

She testified that she had complained to managers that a married co-worker cut her out of important business emails after their affair ended, and that she was subjected to unwanted sexual conversation and advances. She also wrote a lengthy memo detailing the more broadly a pattern of mistreating women she said she saw at the firm.

To return a verdict in favor of Pao for her claims of discrimination, the jury would have had to find that Kleiner Perkins passed her over for two promotions because of her gender, causing her financial damage.

Pao filed two claims of retaliation, requiring the jury to find the company declined to promote her because of her complaints, and later decided to fire her because of her lawsuit, her conversations about sexism at the company, or her original written memo complaining about the workplace culture.

Her lawsuit against workplace sexism in an industry dominated by men – a 2014 Babson College study found only six percent of venture capital partners are women – appears already to have inspired similar complaints.

A pair of lawsuits by female ex-employees at other technology giants emerged during the 24-day trial.

Tina Huang, a former Twitter software engineer, filed what could become a class action lawsuit alleging an informal promotion process that favored men.

Former Facebook employee Chia Hong filed a lawsuit alleging harassment and discrimination that ultimately led to her termination. Lawless, one of the attorneys who represented Pao, has been hired by Hong.

Both Twitter and Facebook have denied the claims.

In a statement after the trial, Pao said she hoped the legal battle would bring more gender equality. “If I have helped level the playing field for women and minorities in venture capital, then the battle was worth it,” she said.

Pao, now the interim CEO of Reddit Inc., sued her former employer for $16 million in lost wages. Punitive damages could have cost Kleiner Perkins as much as $144 million. Pao v. Kleiner Perkins Caufield & Byers, CGC-12-520719 (S.F. Super. Ct., filed May 10, 2012).

Multiple female Kleiner Perkins partners testified to the “boys’ club” nature of the industry, but praised the firm for its fairness. An expert witness said Kleiner Perkins had more female partners than any other venture capital firm and managing partner John Doerr has long been outspoken in his support for gender balance.

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