Pao v. Kleiner Perkins: Some Lessons for Employers Thus Far

| Jason M. Knott

The ongoing trial in Ellen Pao v. Kleiner Perkins Caufield and Byers has made headline news across the country.  It’s being covered by the Wall Street Journal and USA Today, among other national publications.  Those interested in following the trial can monitor the #ellenpao hashtag on Twitter, or watch liveblogs from Re/code or the San Jose Mercury-News.

Why is the trial so newsworthy?  As we reported here, Pao claims that Kleiner Perkins, a prominent Silicon Valley venture capital firm, discriminated against her because of her gender and then retaliated because she complained.  She claims that she was not promoted to a plum senior partner position because she was a woman, and that the firm fired her because she complained and later sued it.  Her story involves sex, boorish behavior, and office intrigue that ranges from the mundane to the highly dramatic.

With that introduction, here are some -- of many -- takeaways for employers from what has transpired thus far:

1.       Sex and the workplace are a dangerous mix.

Pao is not alleging a claim for sexual harassment, so she’s not claiming liability because someone asked for sexual favors, made inappropriate comments, or made unwelcome advances.   But sex is a big part of her case.  She is using it to attempt to show that Kleiner Perkins had a culture of discrimination in which women were undervalued and not given the same opportunities as men.  (For a good example of this kind of case, see Letteri v. Equant Inc., 478 F.3d 640 (4th Cir. 2007), in which a plaintiff made out a discrimination claim using evidence that decisionmakers said that they couldn’t understand “why any man would allow his wife to live away from home during the work week,” commented about physical attributes of other female employees, and said that the plaintiff looked “pretty in pink.")

In Pao’s case, she’s relying on an affair that she had with co-worker Ajit Nazre in 2006.  She testified that after they broke up, Nazre made her job “much more difficult,” and that when she complained, a senior partner merely tried to reassure her by saying that he had met his wife at work.  Kleiner Perkins likely will say that the relationship was consensual, and that having a bad breakup at work doesn’t mean you’re the victim of discrimination.  But a major problem for Kleiner Perkins is that another female employee, Trae Vassallo, has now testified that Nazre made unwanted advances toward her, which could cast Pao’s relationship with Nazre in a different light.

As the evidence concerning the Pao-Nazre affair shows, employers should be watchful and wary of any workplace relationships, particularly when their repercussions reach the office.  Employers can adopt a dating policy to deal with and try to avoid these kinds of problems at the outset, and if problems arise, they should document and address them.  If these conversations aren’t recorded in writing, parties may tell two different stories about them at trial.

Pao also testified that partner Randy Komisar gave her a book that included erotic poems and asked her out to dinner, and that on a plane flight in 2011, Kleiner Perkins partners and guests discussed porn stars and visits to the Playboy Mansion, and commented on the attractiveness of Yahoo! CEO Marissa Mayer.  Standing alone, these events are not in themselves evidence that the firm discriminated in making promotion decisions.  But Pao is using them, and other slights, to help bolster her claim that Kleiner Perkins tolerated a boys-club atmosphere that demeaned women and their value in the workplace.  While there might be an innocent explanation for some of these events – such as the book of poems, which was written by noted songwriter Leonard Cohen – in the harsh gaze of hindsight in a discrimination trial, these events do not help the firm.  The takeaway is that employers should avoid any gifts or invitations that can be misconstrued, and refrain from commenting about sexual topics or the attractiveness of other people.

2.       Focus on performance when making promotion decisions.

Much of the commentary surrounding the trial has focused on the mixed messages that Pao seemed to get from her superiors.  One writer said that men at the firm essentially told Pao: “Speak up — but don’t talk too much. Light up the room — but don’t overshadow others. Be confident and critical — but not cocky or negative.”  In the view of Joan Williams (writing in the Harvard Business Review), these kinds of comments are endemic of the barriers that women still face in the workplace: where a man might be viewed as confident, a woman acting the same way might be viewed as cocky, suffering a backlash.

An employer who focuses on performance is more likely to avoid these sorts of problems.  For example, in Ezold v. Wolf, Block, Schorr and Solis-Cohen, 983 F.2d 509 (3d Cir. 1992), a law firm avoided a trial on a gender discrimination claim after presenting evidence that it refused to promote an associate because “she did not possess sufficient legal analytical skills to handle the responsibilities of partner in the firm's complex litigation practice.”  If Kleiner Perkins had focused less on whether Pao was “cocky,” and more on whether she had shown that she could successfully source venture capital deals, it would have diminished the argument that it relied on preconceptions of gender when it decided not to promote her. 

3.       It’s a good idea to have an anti-discrimination/harassment policy – and be able to find it.

Much of the testimony at the trial has involved the firm’s outside investigation of the concerns that Pao and Vassallo raised about Nazre in 2011.  The investigator said that when he asked for the firm’s anti-discrimination/harassment policy, no one could track it down.  As a result, the firm wrote a new policy.  But Pao is making great hay out of the fact that if there was a policy, it was lost in a file cabinet somewhere.  If you go to the trouble of having a solid anti-discrimination policy – and you should – you should also make sure that employees can access it when they might need it.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.

As the regulatory and business environments in which our clients operate grow increasingly complex, we identify and offer perspectives on significant legal developments affecting businesses, organizations, and individuals. Each post aims to address timely issues and trends by evaluating impactful decisions, sharing observations of key enforcement changes, or distilling best practices drawn from experience. InsightZS also features personal interest pieces about the impact of our legal work in our communities and about associate life at Zuckerman Spaeder.

Information provided on InsightZS should not be considered legal advice and expressed views are those of the authors alone. Readers should seek specific legal guidance before acting in any particular circumstance.