Did Kleiner Perkins learn nothing from the public relations pummeling that accompanied its legal defeat of Ellen Pao?

The venture capital giant technically won its recent, closely-watched court battle against its fired employee and her gender-discrimination lawsuit--though it clearly lost in the court of public opinion. Pao’s lawsuit drew harsh and prolonged scrutiny to the hostile environments facing women trying to break into Silicon Valley’s tech and venture capital worlds in general, and at Kleiner Perkins in particular.

But now her former employers are resorting to punitive actions against Pao, asking her for nearly $1 million in legal costs unless she agrees to drop her appeal of the case.

Or, specifically, lawsuit costs of $972,815.50 (note that crucial 50 cents). That includes witness fees ($131,400 for Harvard Business School professor Paul Gompers to praise Kleiner Perkins as the best VC firm at employing women); deposition costs ($602.15 to transcribe the words of Chi-Hua “women kill the buzz” Chien); court reporter fees ($264.50 per day once the trial got underway); and--my favorite--“models, blowups and photocopies of exhibits” ($224.21, or probably the equivalent of one round of post-victory drinks for Kleiner’s legal team).

All of those costs would be waived "should Ellen Pao choose to bring this legal matter to a close," a Kleiner Perkins spokeswoman wrote in an emailed statement. "We believe that women in technology would be best served by having all parties focus on making progress on the issues of gender diversity outside of continued litigation." 

Yes, asking for such costs may be a fairly routine negotiating tactic to stave off lawsuit appeals. And it’s easy to see the short-term logic for Kleiner Perkins, which obviously wants this suit, the possibility of any appeals and the associated headlines to go away as quickly as possible. (Pao, now the interim CEO of Reddit, is reportedly considering taking the deal.)

On the other hand, witness a new round of headlines this week. It’s hard not to read this sort of nickel-and-diming as petty at best on the part of Kleiner Perkins, a firm that manages almost $7 billion of investments. As lawyer Debra S. Katz told The New York Times, “If Kleiner wanted to look classy, it could have said, ‘This was hard fought and we obviously disagree with your view, but it’s in the interest of all parties to walk away.”

Not so much. Another court document reveals that the VC firm in November proposed settling Pao’s suit by offering her $964,502--as Quartz puts it, “a figure based on (remarkably accurate!) projected litigation costs.”

Pao sued for about $16 million in lost wages; had she won, punitive damages could have made the final bill up to ten times that amount. Put another way, $972,815.50 is significantly less than the almost $3 million in annual compensation that Pao could have qualified for if Kleiner Perkins had in fact promoted her. Think about all the headlines that could have prevented. 

Published on: Apr 24, 2015