No easy wins for women in discrimination lawsuits

This story is part of Solving for XX, a CNET special report exploring what people and companies are doing to make the tech industry more diverse, more equitable and more welcoming to women.

Ellen Pao thought after three years of legal maneuvering, she had a fighting chance of beating Kleiner Perkins Caufield & Byers.

Many observers of the trial, which lasted throughout March, thought so, too -- convinced by her allegations of sexism and bad-boy behavior at one of Silicon Valley's most powerful venture capital firms.

The San Francisco jury of six men and six women didn't buy it. They rejected Pao's claims that her ex-employer discriminated against her and later fired her after she'd complained about a pervasive double-standard in its treatment of men and women. Pao had sued the firm -- which backed notable tech companies from Amazon to Google to Zynga -- for $16 million, in part to compensate for lost income and in part "to bring Kleiner Perkins to the right path."

Now Kleiner Perkins is telling Pao, 45, she owes the firm nearly $1 million in legal costs unless she promises not to appeal. Pao is "considering" the proposal, according to her spokeswoman.

While Silicon Valley waits to hear Pao's answer, others are asking what effect, if any, the case will have on other women in the male-dominated tech industry who may want to take their grievances to court. Will it embolden them to challenge their employers or cause them to step back? Will it spur companies to change their policies? Or will it cause employers to hire fewer women, as some observers speculated during the trial.

But one thing is clear -- the trial has everyone in Silicon Valley talking about discrimination.

"The honeymoon is over, with respect to tech," said Noreen Farrell, the executive director of Equal Rights Advocates, a San Francisco-based nonprofit women's rights organization. "The tech industry is at a crossroads, and it has to decide how it's going to handle this murmur and the actual chorus of harassment."

The reason? Pao may have lost her court case, but Kleiner Perkins -- among the most secretive of all VC firms in Silicon Valley -- had a big loss, too.

"It was a victory for Kleiner Perkins in court, but [not] in the court of public opinion," says Susan Bluer, a San Francisco employment lawyer. "Prior to the trial, the firm had a pristine reputation. Now, firms facing similar situations are probably asking: 'Do we want to be the next Kleiner Perkins?'"

Burden of proof

The number of sexual harassment complaints filed with the state of California have remained fairly constant over the past few decades. In 1997, 5,919 complaints were filed with the Department of Fair Employment and Housing. Last year, plaintiffs filed 4,312 claims. Many experts believe that more than 90 percent of such cases get settled out of court. Countless others never made it that far in the process, with women opting instead to leave the company and find a new job.

"Many claims don't see the light of day," said Phyllis Cheng, who served as the DFEH's director from 2008 to 2014 and is now a partner with business law firm DLA Piper.

As Pao's case clearly shows, the trials aren't sure things. If a case were clear cut, it likely would settle out of court. So what does a woman have to do to win?

For starters, she must be likable, display a strong work record and present a narrative that jurors can compare to their own experiences, says Debra Katz, a Washington, D.C.-based employment and civil rights attorney.

"You must show that this woman would have been promoted if she were a man, show a pattern that this is an environment ripe with gender discrimination and [submit evidence of] direct comments that women are not worthy of advancement," Katz said.

She also has to show that her gender was a substantial reason she wasn't promoted or was fired -- not just a factor in the company's action. That can be a tough bar to cross.

And she has to have thick skin.

Kleiner Perkins, for example, dredged up Pao's poor performance reviews, attacked her character and criticized her personality to explain why she wasn't promoted.

"You don't need to look any further than Ellen Pao to see litigation is akin to just being run over by a car and then getting up and being hit by a semi," adds Farrell. "It not only tears open old wounds and forces you to be back in front of people who made your life horrible, it's also time-consuming, expensive and jeopardizes your future career prospects."

In other words, these lawsuits are rarely filed as get-rich-quick schemes. Few records exist that show how often plaintiffs win sexual bias or harassment trials, or the average jury awards. Large judgments are rare.

In November, a federal jury in San Diego awarded Rosario Juarez $872,000 in lost wages and $185 million in punitive damages after determining AutoZone demoted and then fired her for becoming pregnant. It's believed to be the largest employment law verdict for an individual in US history.

Pao's loss may mean some women will be "hesitant to come forward for now," says Ann Skeet, a director of leadership ethics at Santa Clara University in Santa Clara, Calif. "They feel like it's a risky time."

Raised by wolves?

Pao's case may be the best known in the tech industry, but it's far from the only one. The nearly all-male industry has become notorious for its unconscious bias or just flat-out immature behavior fueled, in part, by a startup culture run by young men with little leadership experience or adult supervision.

Tinder co-founder Whitney Wolfe, for example, sued Tinder and parent IAC, alleging CEO Sean Rad and co-founder Justin Mateen subjected her to "horrendously sexist, racist, and otherwise inappropriate comments, emails and text messages," before firing her. She and IAC settled out of court for an "undisclosed sum." Forbes reported she received "just over $1 million."

Rachel Kremer, who previously worked as a sales consultant at Zillow, alleges she was fired "after experiencing the most heinous acts of sexual harassment imaginable." Kremer's legal filing cites an email a co-worker sent showing a photo of his genitalia, along with a litany of other colleagues' lewd text messages and emails. Most of the messages cited in her lawsuit are too graphic to include in this article.

Zillow said in a statement that it "does not and will not tolerate discrimination or harassment of any kind. ... When Zillow first learned of the allegations, the company quickly investigated and fired two involved employees."

Chia Hong, a former Facebook manager, accuses the social-media giant of being a hotbed of sex harassment and discrimination. Hong, who was fired in 2013, is suing for lost wages and benefits related to her "mental pain and anguish and emotional distress." Facebook says they have "substantive disagreements" on Hong's claims.

Former Stanford University student Ellie Clougherty claims Joe Lonsdale, a venture capitalist and co-founder of data analytics startup Palantir Technologies, took advantage of his position as a mentor at Stanford and physically, emotionally and sexually abused her. Lonsdale claims their relationship was consensual and has filed a suit against Clougherty.

Tina Huang, an ex-software engineer at Twitter, filed a proposed class action lawsuit alleging the microblogging service uses a secretive promotion process that favors men. Huang said Twitter only tells certain employees about job openings and promotions, routinely bypassing women. Twitter disputes Huang's allegations and says, "the facts will show she was treated fairly."

Twitter is being represented by Lynne Hermle, the same attorney who helped Kleiner Perkins defeat Pao.

Janine Yancey, a labor attorney who served as Google's outside counsel in the search company's early days, blames venture capitalists for not providing adult supervision.

"These companies are given millions and millions of dollars and the green light to go ... and they're allowed to make all sorts of really big, ridiculous decisions that impact society and impact their own careers," says Yancey. "Venture capital [firms] have an obligation to counsel and train their founders."

It's not just men working in startups who are accused of behaving badly. Last year, former Yahoo engineer Nan Shi filed a lawsuit alleging her boss Maria Zhang forced her to have sex with her on multiple occasions. A few days later Zhang filed her own suit against Shi, accusing her of defamation and "outrageously false allegations."

And in 2013, a male employee at Square accused then-COO Keith Rabois of sexual harassment. Rabois resigned from the company as a result.

Changes ahead?

If nothing else, Pao's lawsuit has prompted companies throughout the tech industry to reevaluate their employment practices. Women make up 32 percent or less of the workforce at tech's top companies, and the numbers are even lower in leadership and other high-ranking positions, according to diversity figures released by Apple, Facebook, Google and Twitter, among others.

Many companies have vowed to hire more women, but that won't be a quick fix.

They may also need to revisit the idea of what a company's "culture" means since having a work environment that's free of discrimination isn't just the law -- it's a good idea. Few businesses want their reputations damaged by having their dirty laundry aired in front of a 24-hour news cycle. Kleiner Perkins, in fact, offered to settle with Pao before the trial. She declined because, she said, she wanted to make things better for women.

"No woman, whether she works in tech or another industry, should say 'Uh oh, my case got worse because Ellen Pao lost,'" says Bluer, the San Francisco employment lawyer. "Tech companies in particular will be reevaluating their human resources policies or will create one if they haven't already."

And maybe -- just maybe -- that will make life in the workplace more equitable for everyone.

Correction, 10:15 a.m. PT: This story incorrectly described a claim Chia Hong filed against Facebook. Her lawsuit accuses the social network of sex harassment.

Update, 1:45 p.m. PT: Adds comment from Zillow.