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Pao Loses on all Counts in Sex Discrim. Case Against VC Firm

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By Casey C. Sullivan, Esq. on March 30, 2015 11:54 AM

Ellen Pao, the former junior partner at the venture capital firm Kleiner, Perkins, Caufield and Byers, lost her gender discrimination lawsuit against the firm on Friday. In a case that made headlines, Pao had claimed that she was not promoted because of her gender, was subject to harassment, and faced retaliation when she complained.

Pao's case included salacious details, what her attorneys argued was "despicable, malicious, oppressive treatment," as well as allegations of subtle double standards faced by women: things like not being invited to outings or being subject to contradictory, irreconcilable evaluations.

While Pao had claimed she was systematically excluded from the firm's "boys club," Perkins argued that she simply didn't have what it took to exceed as a venture capitalist. In the end, the jury sided with Perkins, and Pao lost on every count.

The Verdict

Pao brought four claims against Kleiner. First, she alleged that her gender was a substantial reason for her lack of promotion to senior partner. Second, she alleged that her complaints about gender discrimination were a substantial reason for her lack of promotion. Third, that Kleiner had failed to take reasonable steps to prevent gender discrimination. Finally, she alleged that she was terminated in retaliation for her complaints and the lawsuit. The jury rejected each claim, 9-3.

Still a Black Eye for Silicon Valley

Despite the win, neither Kleiner nor the rest of Silicon Valley came out unscathed. Once (self-)regarded as a meritocracy, tech has come under increasing scrutiny for its lack of racial and gender diversity. Pao's claims fed into and bolstered this narrative.

Pao's failure in court doesn't seem to have changed that, at least given initial media responses. In one example, NPR reported this weekend that the case, though unsuccessful, "has blown wide open these subtle biases that women deal with ... in the workplace and more so within the Valley." Facebook and Twitter are currently facing lawsuits similar to Pao's.

Always get it in Writing

Pao's suit might also lead to more memorializing -- and maybe more bureaucracy -- in both tech and investment circles. On the stand, Pao claimed that she had discovered Twitter as a potential investment opportunity for the firm -- one which wasn't acted upon with any urgency. Perkins denied this and point out that there was not a single piece of written correspondence to support Pao's claim.

As a result, The New York Times reports, some lawyers are already advising their clients to document any contributions they make to their firms, whether in email, notes or formal memoranda, in order to protect later claims.

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