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Law Firm's Sexual Harassment Suit Big News in CA

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By Deanne Katz, Esq. on July 25, 2012 9:56 AM

Ellen Pao is suing venture firm Kleiner Perkins for sexual harassment and gender bias in a case that is generating a lot of buzz in Silicon Valley.

Pao has worked for Kleiner Perkins since 2005 as a junior partner in the Silicon Valley office. In her claim, she alleges that the company did nothing when she suffered sexual harassment from a coworker with whom she had previously had a romantic relationship. Her complaint also alleges that women are not given the same opportunities for advancement as men, according to Huffington Post.

Kleiner Perkins was attempting to keep this suit out of court by forcing Pao into arbitration. Judge Harold Kahn issued a decision on that issue Friday.

Looks like the case will stay public for now.

Judge Kahn ruled that Pao is not required to go to arbitration because her employment contract does not include an arbitration clause.

While some other contracts Pao entered into with LLCs created by Kleiner Perkins do require arbitration, that doesn't apply to a suit against the company.

So why is Kleiner Perkins so eager to arbitrate?

They believe arbitration will be a quicker and more efficient way to resolve the debate, according to a statement in The New York Times. That may be true since it can take a while for a lawsuit to make its way through a trial. But there are other benefits to arbitration.

Unlike a trial, arbitration is a private proceeding. Parties generally agree to keep the process secret and often the details of any final agreement are also hidden from the public.

Arbitrations are overseen by a neutral third party, often a retired judge, who hears both sides and then renders a decision. The arbitrator does follow the law but often with a more unemotional view than a jury.

In arbitration proceeding there is generally less time to collect and trade evidence which can be problematic for employees. Since the employer owns most documents relating to employment, it can be difficult for employees to get important documents in time for arbitration deadlines.

Arbitration decisions are also binding.

If either party is unhappy with the decision, there is little recourse and no opportunity for appeal. Agreeing to arbitrate means accepting the arbitrator's decision with no second chances.

The choice to arbitrate rather than go to trial can be beneficial for both parties. But in this case, Pao appears to favor moving forward with a trial.

While Kleiner Perkins will appeal the decision, it seems likely that Ellen Pao's sexual harassment case will take place before a jury unless the parties settle before trial. In the meantime, the parties will likely be gearing up for a long battle.

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