Ellen Pao, Kleiner Perkins, and Silicon Valley’s Most Important Trial

Ellen Pao says she was harassed, ignored, and shunned by her firm. They say she’s resentful and has a ‘female chip on her shoulder.’

Robert Galbraith / Reuters

After two weeks of watching former colleagues from venture capitalist firm Kleiner Perkins paint her in a negative light, current Reddit CEO Ellen Pao took the stand yesterday to prove them wrong and plead her gender discrimination case.

They’ve painted Pao as a quiet, resentful, dismissive, and territorial amateur with “a female chip on her shoulder.” But on the stand, she held everyone’s attention with eloquence, elegance, and confidence. However, the trial has much to unfold in the coming days and, relying heavily on conflicting testimonies, is plagued with “hearsay” objections.

The Ellen Pao V. Kleiner Perkins Caufield and Byers case is being followed around the world because gender discrimination is the bane of the tech industry’s reputation. The industry’s male dominance and accusations of sexism have made it synonymous with “tech bros” and “brogrammers.”

The Silicon Valley-based Kleiner Perkins has funded tech titans such as Google, Electronic Arts, Netscape, and Amazon. Pao is suing the firm for $16 million as lost compensation on the grounds that her lack of promotion and ultimate termination was a product of gender discrimination.

The Beginning: Hot, Cold, Childishly Vindictive

Pao’s story began seven months after joining the firm, February of 2006. According to her, she deflected countless advances from the married senior colleague Ajit Nazre for months before finally believing the lie that his marriage was hopelessly over. Pao and Nazre then commenced “seeing each other” in a consensual “off-and-on relationship that lasted between five and six months.”

Pao told the court, “I found that he had lied to me, and that his wife had not in fact left him. I ended it immediately and permanently.” She emphasized, “I was furious. I felt manipulated and deceived.”

Nazre allegedly responded to their breakup by cutting her out of work discussions, emails, and meetings.

“He meant to make my job much more difficult,” Pao testified. “It was hard to get information from him. He would cut me out of e-mails or he would take me out of e-mail threads or he would not invite me to meetings.” She added, “It was something that made it hard for me to do my job. We’re a small partnership.”

After failing to resolve the problem with Nazre herself, Pao went to his supervisor, partner Ray Lane. According to Pao, she told Lane of the relationship and subsequent troubles, but the HR problem was not resolved in the desired manner.

Pao suggested the company adopt harassment policies and training. Lane responded instead with an office romance story of his past and by recommending the two exes have lunch to try and resolve things amicably.

"I thought that it should be investigated," Lane said to the court last week. "I thought that it should be responded to but that it was up to her."

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Partner Randy Komisar’s response was even less helpful. “He said that he didn’t want to be involved, and he didn’t want to know,” Pao testified.

After hearing reports of Nazre harassing three administrative assistants in 2007, Pao reported to partner Juliet de Baubigny, who said Nazre was a “sex addict.” Nazre was nonetheless promoted to senior partner the following year.

Pao also talked with partner Ted Schlein: “I told Ray [Lane] and Ted [Schlein] about the problems that Ajit had caused for me. I said we needed HR policies and training because we were not understanding how to behave appropriately.” She told the court, “I wanted to get the firm to do something about the kind of loosey-goosey way we dealt with issues. It was important.”

Pao complained of Nazre again in her 2009 self-review. “I continued to bring up the issue, and Kleiner Perkins continued to do nothing,” she said. It quickly became apparent to Pao that KPCB seemed unconcerned with her accusations of harassment.

It Gets Creepy

Years later in 2011, Nazre was accused of harassing another junior partner, Trae Vassallo. Nazre tricked Vassallo into a New York date by promising to introduce her to someone who could help with a venture of hers. The mystery helper never arrived at the dinner, but Nazre did get an unsolicited date. Afterwards, Nazre showed up at Vassallo’s hotel room wearing a bathrobe and slippers.

She “pushed him out and closed the door.”

When Vassallo reported the creepy trick to Lane, he responded jokingly, “You should be flattered” (Lane admitted in court this response was a “mistake”). Vassallo then submitted a written letter to the partners detailing Nazre’s New York trick, so the firm hired attorney Stephen Hirschfeld to investigate the claim.

After Hirschfeld determined Vassallo was indeed the victim of unwanted sexual advances, Nazre was fired. Kleiner then asked Hirschfeld to investigate whether Pao had been discriminated against, but the attorney concluded that she had not been treated differently than her male colleagues.

Pao refuted this conclusion on the grounds that Hirschfeld was seeking employment with Kleiner at the time. According to Pao, Hirschfeld told CFO Susan Biglieri he would like to be Kleiner’s human resources lawyer once completing his investigation, a statement that if true would certainly compromise the investigation’s integrity. Pao claims Biglieri relayed his intention to her personally.

Nuts And Bolts

Salaciousness aside, because this is not a sexual harassment lawsuit, it does not hinge on whether or not Pao was sexually harassed. Pao probably suspected that her voluntary participation in the affair would undermine the credibility of harassment charges. This case hinges on whether or not she was discriminated against due to her gender.

What makes this trial internationally high profile does not determine the verdict.

The actions of both plaintiff and defendant show agreement that Ajit Nazre’s cheese has slid off his cracker in terms of sexual inhibition. What they don’t agree on is whether this had anything to do with Pao’s inability to become a successful investor at the firm.

The plaintiff watched three of her male counterparts get promoted to senior partner during her seven years at KPCB and felt she was just as, if not more, deserving.

The defendant has emphasized repeatedly that Pao was hired not to be an investor but to serve as a “chief-of-staff” whose “key operating role” was similar to that of her current position at Reddit.

When asked by the opposing lawyer, Pao confirmed that she was told upon hiring this role would last “anywhere from one to four years, depending on her performance.” However, Pao also testified, “I was told there would be an opportunity for me to invest in companies.”

By Pao’s account, her performance was both excellent and underappreciated. In the fall of 2007, she proposed that Kleiner invest in a new company with potential: “There was a company called Twitter that I thought was really interesting.”

She was dismissed. “Matt Murphy said he had looked at the company before, and that the founding team ‘wasn’t business minded,’ and that they would not be able to generate revenues and create a sustainable business,” Pao testified.

Pao also claimed to have championed for Kleiner’s investments with Flipboard, RPX, and Datameer. She alleged an especially important role in the deal with RPX, a company that went public in 2011. However, Pao took “about three months off” for maternity leave after giving birth to a baby girl and was not allowed to continue working with RPX upon her return.

Pao told the court she mentioned the shun to partner Doerr, who said that “I had done all the work on RPX, and that I had built all the relationships, but that Randy needed a win, so he was going to get the credit for the IPO.”

As an additional shun of note, Pao testified that colleague Chi-Hua Chien organized a Kleiner dinner with Vice President Al Gore in the fall of 2011, and no women were invited. Pao claimed, “[Chien] said that if there were women there, that the conversation would be tempered, and it was because women kill the buzz.”

The trial is far from over, but three weeks of testimonies have painted nearly everyone involved with overarching negativity. Kleiner employees seem sexist and unappreciative of a former employee they regard as kvetching and prickly.

Pao admits that this trial will damage her career but is speaking out because “there should be equal opportunities for women and men to be venture capitalists,” and she thinks it’s important “to make those opportunities available in the future.”

Despite damning evidence of corporate culture, Kleiner has a formidable argument in affording only the opportunities it promised. Surely, the firm cannot wait for this PR disaster to subside.