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Ellen Pao v. Kleiner Perkins trial kicks off with mudslinging

In the high-stakes Silicon Valley case of he-said, she-said, lawyers for both sides argue over whether an atmosphere of gender discrimination persisted at Kleiner Perkins.

Ellen Pao, former junior partner for venture capital firm Kleiner Perkins, alleges she was discriminated against for being female. Kleiner Perkins Caufield & Byers

SAN FRANCISCO -- Opening arguments began in San Francisco Superior Court on Tuesday in one of the most high-profile gender discrimination lawsuits to hit Silicon Valley.

The trial began with two separate tales being spun in the courtroom about the six years Ellen Pao spent working at prominent venture capital firm Kleiner Perkins Caufield & Byers. Pao's lawyers cast her as a high-achieving professional who was consistently overlooked by her superiors because she is a woman, while Kleiner Perkins' attorneys said Pao was incapable of performing her job duties.

This lawsuit has brought to the fore many of the sexism and gender inequality issues that have plagued Silicon Valley over the past several years. Tech firms have been repeatedly criticized for maintaining a "boy's club" atmosphere and not hiring or promoting women. It's these same criticisms that get to the crux of this case: whether Kleiner Perkins treated all of its employees fairly or if it discriminated against certain workers because of their gender.

"Kleiner Perkins used Ellen Pao's many talents for six years, but when it came time to pick who would be the next generation of Kleiner Perkins leaders, Kleiner Perkins only picked men," Pao attorney Alan Exelrod told the jury during his opening statement.

Pao is bringing four central claims in this case, including allegations that Kleiner Perkins discriminated against her based on her gender, retaliated against her when she complained, failed to take all reasonable steps to prevent discrimination against her and retaliated against her by firing her. Now the interim CEO of community-curated news site Reddit, Pao is seeking $16 million for back pay and future wage losses due to the alleged discrimination. Kleiner Perkins denies all four claims.

Kleiner Perkins is one of Silicon Valley's oldest and largest venture capital firms. Founded in 1972, it's backed dozens of heavy-hitting companies, including Google, Twitter, Uber, Genentech and Netscape. The firm touts itself as having more female partners and employees than any other venture capital firm and says it has a track record of being diverse in terms of gender, age and ethnicity. Additionally, Kleiner Perkins says it backs many women-led companies, like Auxogyn, Coursera, Genomic Health, Lockerz, Plum District and Rent the Runway.

Pao first filed her complaint against Kleiner Perkins on May 10, 2012. Her complaint outlined certain instances of alleged sexual advances by other partners, including receiving a book by musician Leonard Cohen titled "Book of Longing" that's filled with nude drawings of women and erotic poems. Pao also alleged that male partners excluded female partners from an executive dinner because the women would "kill the buzz." The firm has repeatedly denied all of Pao's allegations and claimed in early court documents that she "twisted facts and events in an attempt to create legal claims where none exist."

What was presented on Tuesday during opening arguments was a more detailed version of the allegations listed in Pao's complaint. Exelrod, Pao's attorney, spoke first, telling the story of a high-achieving woman who was born to Chinese immigrants. Pao excelled in her academic career, Exelrod said, getting a bachelor's degree from Princeton University, then both a law degree and masters of business administration from Harvard University. Before joining Kleiner Perkins in 2005, she worked for Microsoft and a number of startups.

Pao was first brought onto Kleiner Perkins to be the chief of staff for one of the firm's senior partners John Doerr. In this position, Pao supported Doerr by writing his letters and speeches and doing research. Within her first year at Kleiner Perkins, Pao developed a consensual relationship with another junior partner, Ajit Nazre, which ended badly. Nazre is a central character in this case because Pao alleges he consistently retaliated against her after their relationship ended and, despite her complaints, the firm allegedly didn't intervene. Another female junior partner at Kleiner Perkins, Trae Vassallo, alleged to have been sexually harassed by Nazre in 2011 -- for which Nazre was shortly thereafter fired.

Over the course of her time at Kleiner Perkins, Exelrod said Pao received "glowing" performance reviews. She gained more responsibility over the years, and in 2010 she was promoted to a junior investing partner. But, the prospect of becoming a higher-level partner was never on the table, Exelrod said. Meanwhile, more junior male partners were being promoted to higher positions than Pao.

"In 2011, the only people that were promoted from junior to senior partner were three men," Exelrod said. "Was there a level playing field for Ellen Pao?"

By early 2012, Pao believed she was not being promoted to senior partner because of retaliation, Exelrod said. So she decided to move forward with her gender discrimination complaint. Five months later Pao left Kleiner Perkins, alleging that she was "terminated" and ordered "to clean out my office, leave, and not come back."

"What happens in Kleiner Perkins when a women protests against sex discrimination and retaliation?" Exelrod asked. "She gets fired."

Kleiner Perkins' lawyer Lynne Hermle painted a very different picture in her opening argument on Tuesday. Not only did Pao willingly leave Kleiner Perkins, Hermle said, it was also apparent that her departure was due to alleged performance issues rather than gender discrimination.

"There is an entirely different explanation for Ellen Pao's failure to succeed at Kleiner Perkins," Hermle told the jury. "The evidence will show you that is wasn't because she is a woman. Ellen Pao did not succeed at Kleiner Perkins as an investing professional because she did not have the skills for that job."

Hermle said Pao was supported throughout the years she worked at Kleiner Perkins and was treated "like a surrogate daughter" by Doerr. Despite Doerr's belief in Pao, she continually did poorly on her performance reviews by other partners who said she was "territorial" with a "caustic" work-style, Hermle said. When Pao moved into her junior investing partner position in 2010, she was reportedly unable to handle the job and be a "team player."

"She was not a self starter," Hermle said. "She wasn't in the ballpark; she wasn't even close."

The trial is expected to last about a month with lawyers bringing out several witnesses, but the two parties could decide to settle at any time. It's extremely rare for a gender discrimination case to make it to trial -- only about 1 percent of all cases go to trial. So the impact of this case on the tech industry could be substantial.

"It's seen as a male dominated world -- Silicon Valley and the tech world universe," San Francisco civil rights attorney Traci Hinden said. "The case is alleging that [Pao] wasn't given the same sort of advancement. We see that. There are still a lot of exclusionary practices in this world."