SAN FRANCISCO — Ellen Pao lost her three-year battle with one of the world’s most prestigious venture capital firms on Friday, a painful blow to her and to women across the tech world who championed her on a crusade to nudge the industry toward gender equality.
After three days of deliberations and four weeks of compelling and sometimes sordid testimony, a 12-member jury equally split between men and women found that Kleiner Perkins Caufield & Byers did not discriminate against Pao because of her gender, voting for the firm on all of Pao’s claims.
“I have told my story and thousands of people have heard it,” said Pao, who sued for $16 million but walked away with nothing. “If I helped to level the playing field for women and minorities in venture capital then the battle was worth it.”
The trial rocked the small and insular venture capital world, and the larger tech industry it funds, which in the last year had been under intensifying scrutiny for the lack of women in senior management and tech roles.
By siding with Kleiner, the jury validated the argument the venture firm spent a month building: Pao failed to make it because she was difficult to work with and, despite being given mentorship and “every opportunity to succeed,” she didn’t have the skills to be an investor — and had no interest in following advice to improve, Kleiner attorney Lynne Hermle said.
After the jury handed her a win Friday afternoon, Hermle saluted their service.
“It never occurred to me for a second that a careful and attentive jury like this would find either retaliation or discrimination and I’m glad to have been proven right about that,” she said in a statement to the media.
Kleiner cheered the result while stressing its commitment to gender equality.
“There is no question gender diversity in the workplace is an important issue,” the firm’s partners said in a statement. “KPCB remains committed to supporting women in venture capital and technology both inside our firm and within our industry.”
The jury needed to reach a majority of nine votes for each claim. They reported that they had reached a verdict early Friday afternoon, but while polling the jury, San Francisco Superior Court Judge Harold Kahn learned that the panel had not reached the necessary majority on one claim, with just eight jurors agreeing that Kleiner had not retaliated against Pao by firing her.
The panel resumed deliberations and reached the necessary majority after one juror switched camps, siding with Kleiner.
Juror Steve Sammut, a 62-year-old San Francisco resident, said the group struggled to zero in on the key issues after hearing the testimony. Ultimately, the group grounded its decision in the performance reviews of Pao and her peers at the venture capital firm, said Sammut, who works in manufacturing.
But not all were satisfied with the result. Juror Marshalette Ramsey, a 41-year-old San Francisco resident, said the performance reviews failed to explain why Pao’s male peers were promoted as her career stalled.
“It seemed that Ellen was left behind at that point,” said Ramsey, who voted in favor of Pao and who works as a manager for a transit company.
Washington, D.C., employment litigator Jason Knott on Friday said the trial was more impactful than the verdict itself.
“The trial is what should really have the impact here because it’s a reminder to employers to be vigilant against conscious and unconscious bias in how they treat their employees,” Knott said.
The verdict caps off an ordeal that began when Pao sued Kleiner in May 2012, just five months before top male partners at the firm told her to pack up and leave. She made four claims against the firm: Kleiner Perkins discriminated against her because of her gender by failing to promote her and eventually firing her; the firm retaliated against her because she complained about discrimination both in conversations and in a memo to partners; the firm failed to take all reasonable steps to prevent discrimination against her; and Kleiner Perkins retaliated by firing her because she filed the lawsuit while she was still employed.
The jury found in favor of Kleiner on every claim.
Pao had alleged in her suit that she had an intimate relationship with former colleague Ajit Nazre, who had lied to her about being separated from his wife. After Pao ended the on-and-off relationship, he retaliated by cutting her out of email discussions and excluding her from meetings, she testified. But in court Kleiner showed dozens of text messages and emails that suggested a loving relationship between Pao and Nazre, and she ultimately intervened to prevent him from being fired after their relationship ended. Nazre was dismissed in 2012 after making sexual advances toward another female partner.
Kleiner won the case, but it did not emerge unscathed. Throughout the trial, Kleiner was portrayed as a boys’ club in which a male partner tried to force his way into the hotel room of a female colleague and business associates talked of the Playboy Mansion and porn stars on business trips.
The case will almost certainly force Kleiner to change the way it hires and deals with employee complaints, experts say.
“I don’t think that this will encourage Kleiner to focus on hiring more women, but I bet there will be more of a care not just around documentation (of human resources issues) but also about culture fit when hiring into the company,” said Jason Hanold, an expert on HR issues and chief executive of Hanold Associates.
Other firms, too, are likely taking a hard look at themselves. Many venture firms do not have formal HR departments, and one Kleiner partner testified during the trial that “policies” of any sort were uncommon at venture firms.
Pao’s loss is not expected to have “a chilling effect” on the broader movement to increase the number of women in venture capital and technology, said Felicia Medina, an attorney with the San Francisco office of employment litigation firm Sanford Heisler Kimpel.
“She raised the issue,” Medina said. “More women can at least feel a little more empowered to find out more about their rights.”
Earlier this month, a former Facebook employee sued the social media giant for race and gender discrimination. And a longtime tech engineer sued Twitter last week, claiming the company used a “subjective, secretive promotion process” that “encouraged arbitrary and stereotyped decision making.”
Both tech companies have denied the allegations; lawyers say about 95 percent of these cases are settled in private.
Contact Heather Somerville at 510-208-6413. Follow her at Twitter.com/heathersomervil.
