Silicon Valley is an incredibly competitive environment, and being a woman in a male-dominated industry makes it even harder to advance professionally. According to the recent Gender Diversity in Silicon Valley report, published by law firm Fenwick & West, only 11 percent of executives within the Bay Area's top tech companies are women.

The Valley's venture capital sector has gotten particular attention for issues of gender inequality. Now the climate in the VC world has come into sharp focus in a court case brought by Ellen Pao, a former partner at Kleiner Perkins Caulfield & Byers, where she worked beginning in 2005. Three years ago, Pao sued the firm for $16 million on the grounds of gender discrimination and retaliation, and was subsequently dismissed from her post. Here Inc. takes a look at the case so far. 

The Claims

Pao is suing Kleiner Perkins for $16 million, alleging that she was not rewarded proportionally to her contributions while she was a junior partner at the company. Pao claims that she has been passed over for promotions. In response, Kleiner Perkins states that she was not fired as a result of discrimination, but because she "was not viewed as a good team player or trusted partner by others," and failed to meet the terms of a performance improvement plan in the time period allotted. Nevertheless her 2012 termination was not until five months after she filed the discrimination and retaliation case. 

Who's Who: 5 Key Players

1. Ellen Pao

Pao came to Kleiner Perkins in 2005 to work as a venture capitalist. She claims that as a junior partner she contributed immensely yet was not rewarded accordingly. In May 2012, she filed a lawsuit for gender discrimination, as well as retaliation following the end of an affair with a co-worker. She was fired from the firm in October of that year. Pao is currently the interim CEO for Reddit, a popular news aggregation site.

2. John Doerr

Doerr is a billionaire venture capitalist at Kleiner Perkins and formerly Pao's mentor and boss. In his testimony, he was supportive of Pao but maintained that she was not a team player. He also said that he doesn't agree that Kleiner Perkins is run by men.

3. Ajit Nazre

A former partner at Kleiner Perkins accused of sexual harassment by Pao and Vasallo, Nazre was dismissed after an outside investigator hired by the company found him at fault. Pao says the married Nazre pressured her into having an affair. He was also the subject of accusations by Trae Vasallo, a former general partner and current strategic adviser at Kleiner Perkins. Vasallo said Nazre harrassed her by tricking her into a dinner for two and trying to enter her hotel room, clad in a bathrobe.

Despite Vasallo's complaint in 2011, the firm did not remove Nazre as her primary performance reviewer. Pao and Vasallo both claim that Nazre's evaluations affected their performance reviews, even though he was not listed as a contributor.

4. Randy Komisar 

Pao alleges that senior partner Komisar gifted her 'The Book of Longing' by Leonard Cohen, a work that contains strong sexual content. He then asked Pao out to a dinner in his wife's absence, which Pao says she declined.

Although Pao persuaded Kleiner Perkins to invest in a patent services startup called RPX that later went public, Doerr recommended Komisar for a seat on the company's board. In other instances, Pao says, she was not given proper credit for her work and was made to do menial tasks.

5. Ted Schlein

Schlein is a partner at Kleiner Perkins accused of creating an uncomfortable environment for female workers by Pao. He allegedly caused Pao discomfort during a private jet flight by discussed porn stars with Chegg CEO Dan Rosensweig and asking Pao if she knew or liked any of them. 

What's Next

Regardless of the outcome of the trial, the airing of many of the details and allegations will be a black eye to Kleiner Perkins, and to some degree to the venture capital industry as a whole. To salvage its reputation--and a large chunk of its money--the firm likely will be making these points in its defense.

1. The reasons for firing Pao were that she was not viewed as a good team player and did not exhibit many leadership qualities. 

2. Prior to breaking off the relationship with Ajit Nazre, the relationship was consensual.

3. Pao and Vasallo did not complain of events immediately and Pao only unearthed the issues after she was fired, possibly as revenge. 

4. John Doerr has always been supportive of Pao and she was treated and paid better than all three of her male co-workers who had the same position. Pao's claims of not sitting in particular seats, having an office in a certain area, or taking notes during a meeting are not examples of discriminatory treatment. 

5. Kleiner Perkins does not deem Pao eligible for their severance package because she publicized her firing and found work at Reddit. 

Correction: An earlier version of this article misstated the basis of Ellen Pao's lawsuit against Kleiner Perkins Caulfield & Byers; it is for gender discrimination and retaliation. The article also mischaracterized Kleiner Perkins' actions in regard to Randy Komisar's job following the Kleiner Perkins investment in RPX. He was given a seat on the RPX board. 

 

Published on: Mar 6, 2015