The Inbox – The “Pao Effect”

Ellen Pao may not have won her gender discrimination case against Kleiner Perkins, but she may have inspired numerous women working in Silicon Valley who identified with her cause. According to Fortune, employment lawyers are seeing a heightened awareness among women that the workplace issues they face, and that Ms. Pao articulated in her case, are perhaps more widespread than not. This “Pao Effect” has Kay Lucas, a San Francisco-based employment law attorney, fielding twice as many calls each week from potential clients with workplace gender discrimination concerns. Kelly Dermody, a partner at Lieff Cabraser Heimann & Bernstein, has litigated gender discrimination cases for a decade, and told Fortune that her clients now have a heightened willingness to speak out. Lucas also said that companies are more inclined to settle instead of allowing information to become public, and as we observed with the Pao trial, highly publicized. Lucas noted that many of her clients’ complaints share similar themes involving exclusion from important meetings and denied access to the circles of influence. Yet, she said to Fortune, “these women are not particularly angry; they’re ambitious. They’re not victims; they want to be participants.”

A quick search of legal news gives this “Pao Effect” additional credibility.  According to Law 360, Heather McCloskey recently sued Paymentwall, Inc. for sexual harassment, discrimination, retaliation and failure to take reasonable steps to prevent harassment and discrimination. Ms. McCloskey alleged that executive Benoit Boisset routinely harassed her, calling attention to her physical appearance in a demeaning manner. As she became more vocal in her objections, Boisset used expletives when referring to her, and ultimately terminated her employment. McCloskey also described the workplace environment as young, predominantly male and lacking any formalized set of rules or policies. Kelly Dermody cited these kinds of workplace dynamics as partially to blame for the volume of complaints arising from Silicon Valley. She opined to Fortune that many tech companies take off “really quickly without a lot of attention to human resources.” Consequently, “you have a lot of young managers who make young managers’ mistakes,” which might encompass many of the alleged missteps in the Paymentwall case.

Elisabeth Sussex, a former patent attorney at Jawbone maker AliphCom, recently filed suit against the company, alleging wrongful termination and retaliation. Law 360 discusses the complaint and Sussex’s allegation that the Chief Technology Officer, Michael Luna, had a history of gender discrimination that the company refused to address, allowing him to abuse the law with impunity. Sussex says that when she complained of Luna’s behavior to management, he devised a plan to discredit, demote and ultimately terminate her.

And these recent cases come on the heels of similar suits filed against bigger Silicon Valley players like Twitter and Facebook. While smaller companies like AliphCom and Paymentwall might suffer from a lack of institutional organization and compliance programs that help prevent discrimination claims, the same cannot be said of Twitter and Facebook. We will follow these cases as they unfold, and try to identify the underlying problems that are serving as catalysts for this rising tide of gender discrimination litigation.

• Civil Litigation
• Discrimination