Within a few hours of the Ellen Pao/Kleiner Perkins Caufield & Byers verdict announcement, the following email from "critical communications" firm Brunswick landed in my inbox (the bold is from their original formatting):

The following statement can be attributed to the partners of KPCB:

"Today's verdict reaffirms that Ellen Pao's claims have no legal merit. We are grateful to the jury for its careful examination of the facts.

"There is no question gender diversity in the workplace is an important issue. KPCB remains committed to supporting women in venture capital and technology both inside our firm and within our industry."

That was the entire message. No intro. No signature from the sender (Lin-Hua Wu). Just that. Didn't even bother to spell out the firm's name.

Now, granted, Lin-Hua Wu took it for granted that I (and undoubtedly the 3000 other people she emailed this to) would know precisely what she was talking about. And I do. But, she also knew that the every media outlet in the country was going to follow this and report on it. It wasn't technically necessary to send this to me--someone no member of her firm has ever dealt with before.

But she did. And why? Here's my best guess. Kleiner Perkins won this case, and that's a huge deal. But they still look terrible. Ellen Pao lost because she looked worse than Kleiner Perkins did, but Kleiner Perkins still looks awful and they know it.

Here's the reality of discrimination and sexual harassment cases. There is rarely a company that is so pure and holy that there is absolutely no doubt of its innocence. There is rarely a plaintiff with a halo around her head that shines so brightly we are in no need of a jury verdict.

In theory, those do exist. But when a company is pure and holy, no lawyer will accept the case, and when the plaintiff is wearing a halo the company settles out of court. Things that land in court are icky, messy, and very, very, very expensive.

How expensive? For a high profile case like this I'd expect the tab to be in the millions of dollars. For a small company with a smaller case and smaller profile? Expect to pay between $50,000 and $250,000 in legal costs. That's a bunch of money you don't have.

Here's why Kleiner Perkins landed in court instead of having all plaintiffs' attorneys say to Pao, "Uhh, no. Not gonna take your case, because you'll lose."

Super high profile with lots of press coverage.

Let's face it. Some attorneys are willing to fight a losing cause for publicity. If your company going to court will capture the attention not just of people who focus on HR issues, but The New York Times, well, gulp, you may have a target on your back.

Pure and Holy? Hardly.

One of the big factors against both Pao and KPCB was Pao's affair with married partner, Ajit Nazre. Partner John Doerr wanted to fire Nazre as a result, but instead they settled on docking his bonus. Affairs aren't illegal, and there's no law that says all affairs should result in termination, but when you have sexual relationships between levels it puts your company at risk.

I know that the big buzzword is consensual and Pao never claimed the affair was anything but. But it makes your company look bad. While we all romanticize office love, most relationships don't work out, and when they don't you put your company at risk. If Pao had claimed that she felt coerced, this case could have gone the other way.

Additionally, if you have a policy, you need to enforce it, regardless of the star level of the participants.

Cutthroat can look bad.

Here's the problem with discrimination cases: You may totally believe you are being discriminated against when you are not. I'm certain that venture capital firms aren't places with a lot of warm fuzzies, where everyone gets equal treatment. I'm sure there are many men who were passed over for promotion as well.

The reality is, there are many reasons why things are unfair. Sometimes they can look bad when they aren't. Any time you choose not to promote someone who thinks she (or he!) deserves it, there's a risk. And, in this case, since Pao had claimed discrimination, it could look like retaliation. The jury, of course, concluded that it wasn't, but it's easy to see why it could look that way.

Don't underestimate emotion.

Two jurors, one male and one female, sided with Pao on every issue. Forbes reports:

"One of them, 41-year-old BART manager Marshalette Ramsey, told reporters outside the courtroom that she was 'disappointed' by the verdict but had respect for her fellow jurors, who she said went through 'the same agony' as her in the deliberations room.

"It was obviously a very emotional case, and I connected on a lot of issues," Ramsey said. "I fall into a lot of those buckets myself."

What if Pao wasn't in a big name job--interim CEO of Reddit? Honestly, lots of people, male and female, are going to find it difficult to feel like someone who is currently the CEO of a company has suffered from gender discrimination. But it's likely that if you have an employee sue, she'll be more sympathetic to the average jury member. If more jurors felt "connected," Pao might have won, even if the facts were all the same.

What can you do to lessen your chances of landing in the courtroom? Well, not being newsworthy is a bad idea, but these other things can help you a ton.

Make and enforce strict policies.

Everyone gets trained on sexual harassment and discrimination. Everyone, even the partners. Even the founder. Everyone. Have a policy about dating at work. Enforce it.

Keep great records.

You need to be able to justify why you did everything. Don't keep records just in response to problems. You don't know when a problem will erupt, and records from before that will help you a ton.

Offer severance and outplacement when you terminate someone.

KPCB did offer Pao severance, which she turned down. But most people won't do the same, and you can require them to waive some (but not all) of their rights to sue in exchange. Severance combined with a general release can not only lessen your chances of avoiding a lawsuit, it also allows your former employee to move on with her life. It gives her time and money while she finds a new job. People who are able to move on are less likely to hold a grudge against you.

KPCB won this case, but you don't want to be in a position where a judge thinks there is enough evidence to go forward. The risk is high and the cost is great. Think before you act.

Published on: Mar 30, 2015