Silicon Valley’s Kleiner Perkins Wins Gender Discrimination Lawsuit

In a shockingly short deliberation for such a highly-visible gender discrimination lawsuit, a San Francisco jury of six women and six men ruled against former junior partner Ellen Pao on Friday on the three most important claims brought against the prestigious Silicon Valley venture capital firm of Kleiner, Perkins, Caufield and Byers.

Despite the jury ruling 8-to-4 against Pao on the remaining claim that she was fired as retaliation for filing her lawsuit, the judge sent the jury back sto see if they could get the necessary ninth vote to dismiss the final claim against KPCB.

The salacious lawsuit, filed in 2012, has been a lightning rod for Jesse Jackson and other diversity camp followers to disparage the “backward culture” of Silicon Valley. Unmasking Silicon Valley’s supposedly greedy venture capitalists seemed like a done deal in a case that was supposed to be about the larger implications regarding the future of women and minorities in the tech field.

Expecting some big-money victory for Ellen Pao, the pitchbook.com blog, which serves as the most informative source for statistics and insight on private equity venture capital investing, published a story yesterday revealing that “female upper-level professionals at PE firms is embarrassingly low in most cases, coming in at under 9% of top roles in the U.S.” Regardless of the supposed sexual revolution since 1970s, the percentage of women actually fell from an average of 12.9% from 1970 to 1979.

However, the jury ruled that Pao’s gender was not a “substantial” reason for the firm not to promote her or to terminate her employment. Pao claimed that she was denied a promotion and subsequently fired after ending a brief affair with a senior partner. That seemed to win no credibility with the jury–and neither did her attorneys’ effort to paint KPCB as a boys’ club where male senior partners hit on female junior partners.

Ellen Pao had asked for $16 million in compensatory damages, plus potential punitive damages of up to $144 million. But the case morphed over the four week trial as the Kleiner Perkins defense team, led by Orrick, Herrington & Sutcliffe partner Lynne Hermle, obliterated most of Pao’s alleged victimization.

The biggest “gotcha moment” turned out to be Hermle’s ability to flip the script on the plaintiff team’s assertion that Pao and two female colleagues were paid less than three male colleagues with similar qualifications. Using a graph, Hermle demonstrated to the jury that Pao earned more than all three of the men during her entire tenure at KPCB. In 2011, Pao made $380,000 a year, not including a bonus, while one male colleague made almost $100,000 less.

Hermle also bashed Pao’s perceived failure to be a team player by focusing on complaints that Pao was “territorial,” “difficult to get along with,” and “seems to have clashes or issues with many different partners.”

Hermle unveiled emails and other documents that designed to paint Pao as an untrustworthy co-worker without empathy. In a 2009 KPCB self-review, Pao complained of a co-worker’s frequent trips to Asia to comfort his dying mother suffering from brain cancer. “I fill in the slack when others drop the ball,” Pao wrote, “which I find unpleasant and which others often resent.”

Trial was expected to be a toss-up after final arguments by the plaintiff and defense attorneys on Tuesday. Most observers were surprised that Kleiner Perkins even chose to fight the charges and suffer bad publicity, rather than quietly settling for cash.

But gender-equal jury that included a painter, a physical therapist and a prison nurse stayed fully engaged, taking notes during weeks of testimony. My legal sources suggested the question would come down to whether jurors believed Pao is a victim, or whether she is an abrasive and victimizer. Ellen Pao lost that argument.