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Jury decisively says Ellen Pao lost sexual-discrimination case against Kleiner Perkins

After a second round of deliberations, the jury gives a decisive victory to prominent venture capital firm Kleiner Perkins, which was being sued for gender discrimination by former junior partner Ellen Pao.

Ellen Pao, right, leaves the courthouse with attorney Therese Lawless after the jury ruled against Pao in a sexual-discrimination suit against storied venture capital firm Kleiner Perkins.
Ellen Pao, right, leaves the courthouse with attorney Therese Lawless after the jury ruled against Pao in a sexual-discrimination suit against storied venture capital firm Kleiner Perkins. Justin Sullivan/Getty Images

SAN FRANCISCO -- Did Kleiner Perkins Caufield & Byers retaliate against Ellen Pao when it fired her? Ultimately, a jury said "no."

But it took two rounds of deliberations over two days to come to that decision. A jury of six men and six women returned to San Francisco Superior Court on Friday and by the afternoon was ready to render its verdict. Its initial findings: Ellen Pao had substantially lost her case against the prestigious Silicon Valley venture capital firm.

People in the courtroom audibly gasped, and Kleiner Perkins lawyer Lynne Hermle hugged her team while Pao feverishly took notes.

But it turned out the reactions were premature: The judge ordered more deliberations after determining the jurors had not properly counted their votes in one aspect of the decision.

"There have to be nine jurors on each count," said Melinda Riechert, a high-tech employment lawyer with Morgan, Lewis & Bockius. "If there's not nine, they don't have a verdict."

The question that remained to be decided was the one regarding whether Kleiner Perkins had retaliated against Pao after she filed a lawsuit alleging unequal treatment because she is a woman. Pao's case hinged on that claim, as she sued for $16 million, based largely on lost income and what she could have earned if she'd been promoted to senior partner.

Once the jurors were asked to individually confirm their decisions, Judge Harold Kahn said there were too few "no" votes on Pao's claim that Kleiner Perkins had retaliated against her. Four of the six female jurors voted no on all counts. The jury had fallen short by one vote on the critical claim.

Before being sent back, the jury said it had agreed Kleiner Perkins did take reasonable steps to prevent gender discrimination. The jury also decided Kleiner Perkins was not discriminatory when it decided not to promote her.

The team from Kleiner Perkins appeared pleased, seemingly having won the case. Pao smiled as well, as she passed through a throng of journalists sitting in the hallway when she re-entered the courtroom two hours after the jury was sent back to deliberations.

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In the end, though, Pao lost when the jury returned with a decisive verdict that Kleiner Perkins had not mistreated her.

"I want to thank my family and friends for their love and support during this very challenging time," Pao said after the decision to the press corps covering the trial, which has been nicknamed the "Paoparazzi."

She added that if she helped to level the playing field for women in venture capital, then the case was worthwhile. "I have told my story, and thousands of people have heard it."

Kelly Dermody, a San Francisco-based attorney who has handled discrimination cases against big Silicon Valley companies, agreed that the case has had an impact. "The high-profile nature of this litigation has caused many Silicon Valley companies to ask themselves uncomfortable questions about whether their cultures exclude women from the best opportunities or positions," she said, "or whether they hold them to different standards of performance than men."

The partners at Kleiner Perkins said in a joint statement that the jury's verdict reaffirmed that Pao's claims had no legal merit. "There is no question gender diversity in the workplace is an important issue," they said. Kleiner Perkins "remains committed to supporting women in venture capital and technology both inside our firm and within our industry."

As Dermody suggested, the case could still have far-reaching ramifications in regard to how companies throughout the tech industry hire and promote women. On average, about 30 percent of tech companies' workforce is female, according to diversity reports published by some of Silicon Valley's giants, including Apple, Facebook and Google. That percentage drops for women in leadership and technical roles. Earlier this month, Facebook was sued by an ex-employee who claimed a litany of discrimination and harassment practices at the company. Last week, a former software engineer at Twitter filed a proposed class-action lawsuit against the microblogging service for allegedly using a secretive promotion process that favors men.

Pao has said she brought the suit to force a change in behavior at Kleiner Perkins -- and other companies. "Every individual in this country is allowed to go to work and have equity in the workplace," Pao attorney Therese Lawless told jurors in her closing arguments Wednesday. "Every individual is allowed to have the same standards applied to them. That's what she wanted. That's why we're here."

A potentially landmark case

A former junior partner at Kleiner Perkins, one of Silicon Valley's most famous venture capital firms, Pao claims she was punished and eventually fired in 2012 for questioning the firm's treatment of women. Her lawyers argue the firm -- which backed notable tech companies from Amazon to Google to Zynga -- judged male and female employees differently in an illegal double-standard.

"I really believe, win or lose, this case has been really helpful in bringing to light the huge gender disparity and the behavior that happens in the tech world," said Joyce Ehrlinger, a psychology professor at Washington State University and author of a study that found women consistently underestimate their performance.

Pao's attorneys offered examples about her being excluded from important dinners, including one at the home of former Vice President Al Gore. Pao also described a men-only ski trip to Colorado and said she felt uncomfortable on a plane ride with her male co-workers who openly talked about porn stars and the Playboy mansion.

Kleiner Perkins countered that 20 percent of its senior partners are women -- three times more than the industry average -- as proof that it doesn't discriminate against women. The firm contended that Pao was a hostile employee who didn't work well with others. Pao is now the current interim CEO of the social-news website Reddit.

On Wednesday, the two women lawyers speaking on opposing sides delivered contradictory versions of the facts leading up to the lawsuit. Kleiner Perkins' Hermle argued that Pao weaved "a tale of retaliatory woe" and planned an elaborate exit strategy in late 2011 after learning that summer that she would not be promoted to senior partner.

"She was not in the universe of qualifications," Hermle said about Pao, who has an undergraduate degree in electrical engineering from Princeton University and an MBA and law degree from Harvard University. "She did not have the deep expertise. She did not have the investing experience."

Lawless countered that Pao was at least as qualified as her male colleagues, who were promoted -- if not more so. The real problem, said Lawless: an uneven playing field.

"When Ellen Pao wanted a seat at the table, others thought she was being presumptuous," Lawless said. "But it was normal for her to do that. How do you think her male colleagues got on the many boards they sat on?"

Lawless accused the firm of acting entitled and fostering a culture where men are treated differently than women and promoted over them -- "where men are allowed to behave in a certain way and are rewarded, and when women are displaying the same kind of characteristics are penalized," Lawless said. "It's not fair."

Pao didn't say whether she would participate in the Ask Me Anything, or AMA, sessions Reddit is known for hosting. But she did elaborate on her statement from the courtroom steps later in a series of tweets, saying "To support the entrepreneurs of tomorrow, we need to show leadership today."

Her tweet stream leads off with a pinned tweet she originally posted March 14, which quotes Martin Luther King Jr.: "Our lives begin to end the day we become silent about the things that matter."