Kleiner Perkins prevails in Ellen Pao sex-bias case

Ellen Pao arrives at the San Francisco Superior Court to her the verdict on her case on March 27th 2015. Ellen Pao arrives at the San Francisco Superior Court to her the verdict on her case on March 27th 2015. Photo: Sam Wolson, Special To The Chronicle Photo: Sam Wolson, Special To The Chronicle Image 1 of / 5 Caption Close Kleiner Perkins prevails in Ellen Pao sex-bias case 1 / 5 Back to Gallery

Venture capital firm Kleiner Perkins Caufield & Byers did not discriminate against former junior partner Ellen Pao for her gender, nor fire her because she filed a high-profile gender-discrimination lawsuit against the firm, a jury found on Friday.

A six-man, six-woman San Francisco Superior Court jury sided in favor of Kleiner Perkins on all claims after more than two days of deliberation and more than four weeks of testimony that has been closely watched in Silicon Valley and around the country as tensions over the lack of diversity in the technology industry have swelled.

The verdict was a major victory for Kleiner Perkins, which at the trial was portrayed as a firm that had fallen from its glory days as an early investor in companies such as Google and Amazon.

Pao filed suit against Kleiner Perkins in 2012 for $16 million in damages for gender discrimination and retaliation, plus unspecified punitive damages. She alleged that Kleiner Perkins had promoted male partners over equally qualified women at the firm, including herself, and then retaliated against her for raising concerns about the firm’s gender dynamics by failing to promote her and finally firing her. Pao, now interim CEO of the message board site Reddit, was fired after seven years at the firm following her 2012 lawsuit.

Kleiner Perkins contended that Pao was not promoted and eventually let go because she was a difficult employee who did not get along with colleagues and ultimately failed to grow into the role of venture capitalist.

The trial offered dueling viewpoints: one of a boys club workplace where Pao was not valued despite bringing the firm substantial returns, the other of an employee who was given ample support and numerous opportunities to succeed but still did not measure up.

The jury sided with Kleiner Perkins on all four claims, finding that the firm:

•Did not discriminate against Pao because of her gender by failing to promote her or firing her.

•Took all reasonable steps to prevent gender discrimination against her.

•Did not retaliate against Pao by failing to promote her after she raised concerns about the position of women at Kleiner Perkins or filed the lawsuit.

•Did not retaliate against Pao by firing her after she raised concerns about the position of women at Kleiner Perkins or filed the lawsuit.

In a suspenseful twist, the jury initially returned to the courtroom with a verdict of 8-4 in favor of Kleiner Perkins on Pao’s claim that her firing was retaliatory, though a vote of 9-3 is required for a verdict.

Getting numbers right

At the last minute, one juror had changed his vote. After some confusion in the courtroom, Judge Harold Kahn sent jurors back to deliberate. They returned with a 9-3 verdict. The jury voted 10-2 on Pao’s discrimination and second retaliation claim. (The claim of whether the firm failed to prevent discrimination was contingent upon finding that discrimination existed.)

The trial was a spectator event, with testimony from tech-world celebrities such as Kleiner Perkins senior partner John Doerr and “Queen of the Internet” Mary Meeker that offered insight into not only Pao’s case but also the secretive world of venture capital. During closing arguments, the courtroom was so crowded that a clerk sprayed air freshener to keep the scent of sardine-packed bodies under control. Viewers were rewarded with scintillating details of the Silicon Valley high life — private jets, dinners at Al Gore’s San Francisco apartment and salaries of $500,000.

“I have told my story,” Pao told the media after her defeat, appearing emotional but offering a faint smile.

“If I’ve helped to level the playing field ... then the battle was worth it,” she said.

Several jurors said that the decision was difficult.

Juror Steve Sammut said he was swayed by Pao’s performance reviews, which changed dramatically when her duties shifted to focus on investing. As Kleiner Perkins contended, the performance reviews suggested that Pao wasn’t quite right for venture capital, he said.

“Today’s verdict reaffirms that Ellen Pao’s claims have no legal merit,” a Kleiner Perkins spokeswoman said in an e-mailed statement. “There is no question gender diversity in the workplace is an important issue. KPCB remains committed to supporting women in venture capital and technology both inside our firm and within our industry.”

But the sweeping victory for Kleiner Perkins did not soften the exposure that the trial brought to the issue of sexism in the technology world — exposing lurid details such as the male partner who showed up at a female colleague’s hotel room in a bathrobe, uninvited, on a business trip.

Curtain pulled back

“Ellen Pao’s case is a win for any woman facing gender discrimination and harassment in the workplace, in Silicon Valley and beyond,” said Felicia Medina, a San Francisco managing partner at Sanford Heisler Kimpel who has worked on several large gender discrimination cases. “The curtain has been pulled back, providing a rare glimpse into the lack of equal employment opportunities for women in Silicon Valley.”

In some ways, the wider ramifications of Pao’s lawsuit have already begun to set in.

Earlier this month, a former Facebook program manager from Taiwan sued the social network for harassment and discrimination based on her gender and race. A few days later, Twitter software engineer Tina Huang filed a class-action suit against her employer, alleging that the company’s secretive promotions system favors men. If Huang is granted class-action status, the impact of the case could be huge.

Freada Kapor Klein, founder of the Level Playing Field Institute, said that since the Pao case began, more than a dozen tech companies and venture capital firms have reached out to learn how they can create work environments more friendly to women.

“Her litigation has forced the public to more seriously consider many issues that people like Pao confront in the modern workplace,” said Carl Tobias, a professor at the University of Richmond School of Law.

Pao may appeal the verdict. If the case makes it to an appeals court, it could set a precedent for how to consider more subtle forms of bias in court.

Kristen V. Brown is a San Francisco Chronicle staff writer. E-mail: kbrown@sfchronicle.com Twitter: @kristenvbrown