Ellen Pao 'considering' Kleiner offer to waive fees in sex case if she doesn't appeal

The storied venture capital firm says it will waive almost $1 million in legal costs if Pao doesn't appeal her loss in the headline-grabbing sex-discrimination case.

Terry Collins Staff Reporter, CNET News
Terry writes about social networking giants and legal issues in Silicon Valley for CNET News. He joined CNET News from the Associated Press, where he spent the six years covering major breaking news in the San Francisco Bay Area. Before the AP, Terry worked at the Star Tribune in Minneapolis and the Kansas City Star. Terry's a native of Chicago.
Terry Collins
3 min read

Ellen Pao, right, with attorney Therese Lawless after their courtroom loss. Pao could avoid paying legal fees if she refrains from filing an appeal.
Ellen Pao, right, with attorney Therese Lawless after their courtroom loss. Pao could avoid paying legal fees if she refrains from filing an appeal. Justin Sullivan/Getty Images

Ellen Pao is "considering" not appealing her loss in a high-profile sex-discrimination case against one of Silicon Valley's most prestigious venture capital firms.

Why? To avoid paying nearly $1 million in legal costs.

Pao's legal team is reviewing a court filing made Thursday by VC firm Kleiner Perkins Caufield & Byers that seeks to recover about $973,000 in legal fees, said Heather Wilson, a spokeswoman for former Kleiner Perkins employee Pao.

Kleiner Perkins said in a statement that it would waive the fees if Pao agreed not to appeal her loss. Pao had sought $16 million in lost wages and potential earnings, according to her lawsuit, which rocked Silicon Valley, captured the nation's attention and cast a spotlight on gender and racial disparities in tech.

Pao's team is "considering the proposal," Wilson said.

On March 27, in San Francisco Superior Court, a jury of six men and six women rejected Pao's claim of discrimination and retaliation over her 2012 firing from Kleiner Perkins. The monthlong trial included accusations of a boys club-like atmosphere at the firm, testimony about alleged poor job performance on Pao's part during her seven years there, and discussion of Pao's affair with a married colleague.

Pao, 45, and now CEO at social-networking and news site Reddit, said in interviews earlier this month that she and her representatives were " in the midst of making some decisions" about whether to appeal the case.

But Kleiner Perkins is offering to waive all legal costs should Pao choose to "bring this legal matter to a close," firm spokeswoman Christina Lee said in a statement Thursday. Kleiner Perkins' costs include about $865,000 in expert witness fees, according to the court filing.

"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," Lee said.

Pao said in a series of tweets after her loss that the lawsuit was about more than money.

"If we do not share our stories and shine a light on inequities, things will not change," Pao said. "Hopefully my case will inspire the venture capital industry to level the playing field for everyone, including women and minorities."

Kleiner Perkins' filing to recoup legal costs -- and its request to Pao -- are fairly standard practices, said Steven Clark, a San Francisco Bay Area defense attorney and a former prosecutor.

"This is not uncommon, and since Kleiner Perkins prevailed, they could be entitled to a significant reimbursement of certain costs," Clark said. "It's basically another settlement whereby both sides will walk away forever. Kleiner won't seek reimbursable legal costs, and Pao would not file an appeal."

Clark said he was surprised to learn from Thursday's filing that Kleiner Perkins offered to settle with Pao for $964,502 last November, but Pao never responded. The case went to trial in February.

"It's very interesting and was very risky for her to turn it down, because if you lose, which she did, you will be responsible for a significant portion of the winning party's legal costs," Clark said. "Now she has this opportunity to possibly waive her appeal, walk away and not have to pay."

In related news, the winning lawyer for Kleiner Perkins, Lynne Hermle, is now defending social-networking giant Twitter in a gender-bias lawsuit filed last month by Tina Huang, a former employee.