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Jury finds no gender discrimination against Ellen Pao in case that captivated Silicon Valley

The Silicon Valley powerhouse venture capital firm, Kleiner Perkins Caufield & Byers, was cleared of claims it short-circuited the career of former partner, Ellen Pao, because she is a woman. (Video: Reuters)

A San Francisco jury found Friday that a prestigious venture capital firm did not discriminate against a former junior partner because of her gender, concluding a month-long trial that, despite its outcome, launched a wide-ranging discussion about how women are treated in Silicon Valley.

Ellen Pao had accused Kleiner Perkins Caufield & Byers of treating her “despicably, maliciously, fraudulently, and oppressively” and later retaliating by denying her a promotion and firing her when she complained. Kleiner Perkins, famous for early investments in Amazon and Google and which had a good track record of hiring female executives, countered that Pao was a difficult employee who simply didn’t make the cut.

The jury of six men and six women deliberated for three days before deciding in favor of Kleiner Perkins on three counts related to gender discrimination as well as a fourth count on whether Pao was fired in retaliation for her lawsuit. Pao had asked for $16 million in compensation, plus punitive damages.

“I have told my story and thousands of people have heard it,” Pao said after the decision. “If I helped to level the playing field for women and minorities in venture capital, then the battle was worth it.”

Regardless of the jury’s decision in favor of Kleiner Perkins, many said the trial remains a rebuke of Silicon Valley’s male-dominated culture and a warning sign to other technology firms and start-ups — a message that seemed to find a wide audience despite the particulars of a difficult case. These supporters point to the gender disparity in technology jobs, such as at Google, Apple, Facebook and Yahoo, where women hold 15 percent to 20 percent of those positions. And recent gender-discrimination lawsuits filed against Twitter and Facebook are likely to further fuel the debate.

The courtroom testimony in Pao's case was at times salacious, with dissections of an office affair and the gift of an erotically-charged poetry book. But the jury’s decision appeared to hinge on more subtle signs of sexism and harassment, the kind of “boy’s club” culture that women in technology have complained about for years. That’s what kept the courtroom packed -- former Yahoo president Susan Decker was among the curious driven to drop by for closing arguments earlier this week -- and made the case fodder for obsessive Twitter updates.

"It's a clear win for Kleiner Perkins," said Jason Knott, a Washington, D.C., attorney specializing in employment law and who closely followed the case. "But it still raises the issue that employers have to be sensitive to how they treat workers."

Some tech companies already have moved to make their workplaces more welcoming to women, said Freada Kapor Klein, a diversity consultant in the San Francisco area.

She said she’s been contacted for help by more than a dozen companies in recent weeks as the Pao trial unfolded. The focus is no longer about preventing just what she calls “smoking gun” acts of discrimination. Companies want advice on rooting out smaller problems.

“They are moving to dismantle unwelcoming work environments and hidden or subtle biases,” Klein said.

Joelle Emerson, chief executive of Paradigm, which helps tech companies with diversity, said she believes Pao’s case will continue to reverberate in Silicon Valley.

“My hope is that it will help other companies be more thoughtful,” Emerson said.

Pao, now 45, arrived at Kleiner Perkins in 2005 as chief of staff to the firm’s best-known partner John Doerr. She was bright. She had an electrical engineering degree from Princeton and graduated from both Harvard’s law and business schools. She was promoted to junior partner at the firm. But she was fired in October 2012, not long after filing her lawsuit.

At Kleiner Perkins, women make up more than 20 percent of the partners, making it a stand-out among competitors. Firm partner Mary Meeker testified at trial that it was “the best place to be a woman in business.”

But Pao’s attorneys claimed she was the victim of a male-dominated workplace where women were denied the same opportunities as men.

The headline moments came when Pao testified a male coworker with whom she had an affair retaliated against her by cutting her out of emails and meetings – and the firm did nothing to stop it.

"Going back I would not have done it again," she testified about the affair. "I didn't think it was inappropriate at the time."

She said she was subjected to a discussion about pornography on a plane ride with her male colleagues. She said a partner gave her a copy of Leonard Cohen’s “Book of Longing” as a Valentine’s Day gift. Pao also said she and other female employees were not invited to firm dinners at the home of former Vice President Al Gore and left out of an all-male firm ski trip to Colorado.

Kleiner Perkins lined up explanations – the poetry book was not intended to create discomfort and other women had been invited to the Gore dinners and on the ski trip. Meeker, the high-profile female partner, testified she’d dined at Gore’s house before and was invited to ski in Colorado, but declined.

But the case seemed to balance on smaller slights. Pao said she was denied a seat by Kleiner Perkins on another company’s board of directors in part because she was going on maternity leave. Her lawsuit claimed male junior partners were allowed to sit on the boards of multiple companies that the firm invested in, while female colleagues were limited to one.

Pao’s attorney said Pao excelled at the firm, leading to an investment in a company that later enjoyed great success and helping two companies merge. Two male colleagues of Pao had been promoted, even though one was called confrontational and another was accused of having "sharp elbows," an apparent reference to his treatment of other workers.

Similar criticisms of Pao were used to justify her being fired, Pao’s lawyer Alan Exelrod said.

"The evidence in this case compels the conclusion that men were judged by one standard and women by another," Exelrod told the jury this week. "The leaders of Kleiner Perkins are the ones responsible for this double standard."

Kleiner Perkins has countered that Pao was a chronic complainer who twisted facts and circumstances in her lawsuit and had a history of conflicts with colleagues.

“The complaints of Ellen Pao were made for only one purpose: a huge payout for team Ellen," Kleiner Perkins attorney Lynne Hermle told the jury.

In recent weeks, at least two more gender discrimination lawsuits have hit major Silicon Valley firms. Facebook was sued in February by a former employee who claims gender and racial discrimination, among other allegations. Chia Hong, who is a woman and Taiwanese, claims that she was fired in 2013 and replaced by a less qualified man.

Earlier this month, Twitter was hit with a class action lawsuit by a former software worker. Tina Huang, who worked at Twitter’s San Francisco headquarters for six years, claims she was passed over for promotion because of her gender and then fired when she complained. Huang’s lawsuit alleges that Twitter did not openly post job opportunities, but relied instead on a secretive “shoulder tap” process that favored the “boy’s club.”

For Emerson, the Twitter lawsuit carries even more potential for changing the tech culture than Pao’s closely followed case. That’s because it’s not about the plight of one women, Emerson said, it’s about the structural discrimination that many believe exists in the tech world.

Twitter actually was a sticking point in Pao’s trial. In 2008, Pao pushed for Kleiner Perkins to invest in the popular messaging site. But the firm turned her down, only to put funding into the company later.

Pao’s attorney, in his closing argument to the jury, noted the irony that word of the verdict would be spread by Twitter now.

It just wasn't the verdict he wanted.

Associated Press contributed.