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Kleiner Perkins Caufield & Byers partner Trae Vassallo made a matrix chart before she met with a harassment and discrimination investigator that showed something curious: Investments by female partners at the firm significantly outperformed the investments by men, who “overhyped” their investments.
But the firm had been slow to promote her and other female partners, even as it elevated men.
The chart wasn’t included in the investigation, conducted by a San Francisco lawyer named Stephen Hirschfeld who was hired by Kleiner to investigate reports of sexual harassment. He concluded in a late a 2011 investigation that there was no gender-based discrimination at the firm.
That case is being tried again this month, now in the San Francisco Superior Court.
As former partner Ellen Pao sues Kleiner for gender discrimination, asking for $16 million in damages, Hirschfeld’s evidence — including more than a dozen interviews with partners — has been laid out over the past two days for the jury to decide anew. After his investigations of complaints by Vassallo and Pao, for which he was paid $575 an hour by the firm, he recommended firing Ajit Nazre, who had harassed Vassallo, but concluded there were no broader issues of discrimination or retaliation that Pao was alleging.
The past two days served as a re-investigation into those interviews, which are not formal court evidence but for legal purposes are considered second-hand recollections, or “hearsay.”
On the stand, Hirschfeld seemed to hew away from his written notes from the investigation. Several times, he denied what he’d written down in his notes had happened quite like he’d written and asked Judge Harold Kahn and the plaintiff’s attorney to consider his reinterpretation or “context” as he called it. Judge Kahn, sighing heavily at one point, interjected and asked Hirschfeld to just read what he had originally written.
His investigation — launched after Vassallo had reported another partner showed up unwanted at her hotel room in nothing but a bathrobe and then extended into Pao’s allegations of discrimination — had an inauspicious start. When Hirschfeld asked Kleiner for its discrimination and retaliation policies, the firm called back and said it couldn’t find one.
The findings have been repeatedly contradicted by testimony from Kleiner partners. In the most egregious example, Hirschfeld confirmed Doerr told him Pao had “a female chip on her shoulder,” which Doerr vehemently denies. So one of them is lying, or is, at least, mis-remembering.
A lot has happened over two days. Below is what’s new and important.
Fear of Maternity Leave and “A Sexual Predator” at the Firm
In an interview with partner Maritza Liaw, she said Vassallo referred to Ajit Nazre as a “sexual predator” and that he had a pattern of bad behavior within the firm for a long time. Nazre was promoted even after Pao had complained about him.
Vassallo seemed to agree with this characterization. She told Hirschfeld that someone at Kleiner was “preying on female partners.”
She said he had a “100 percent hit rate with trying to develop relationships with female partners who were junior to him,” and added that it made her angry that he might also be doing the same thing to entrepreneurs.
Even after he’d been fired for harassing Vassallo, touching her inappropriately and then showing up in nothing but a bathrobe at her hotel room door, Nazre showed up again — by invitation and to Vassallo’s dismay. Senior partner Ray Lane had asked him onto a conference call with Vassallo. Lane, who has been established as one of the more old-fashioned partners at the firm, told her that Nazre had done “one stupid thing” and “was sorry.”
Pao felt she had to stay involved with clients during maternity leave — that she had to “keep her head in the game” and that some women at the firm had talked about having this sense. Vassallo, for example, was taken off the board of Enphase Energy around the time of her maternity leave. Pao had written an email discussed in court earlier thanking Randy Komisar and Doerr for helping her realize she shouldn’t have a board seat because she too would have to go on maternity leave.
Meanwhile, Lila Ibrahim, who served as John Doerr’s chief of staff after Pao, reported to Hirschfeld that senior partners didn’t respect Pao, even though Ibrahim had only had positive interactions with Pao. Ibrahim complained about a fellowship program Kleiner started to recruit engineers into its portfolio companies — of 22 students, 21 were men.
Pao’s attorney Therese Lawless quoted Hirschfeld’s note from the Ibrahim interview: “She also told you that it was hard for women to get a word in edgewise because of the fact that men have big voices and were boisterous.”
“There were tough personalities, including some women,” Hirschfeld corrected.
Lawless seemed confused and continued: “In your notes you wrote it was hard to get a word in edgewise when you had men with very big voices.”
Hirschfeld said Ibrahim hadn’t said men, that his notes were incomplete, and his memory today on the stand was more accurate.
Kleiner Men Just Happen to Feel More Comfortable With People Who Happen to Be Men
Vassallo reported that the senior leadership, which was almost entirely male, mentored only young men and that they formed “alliances.” The three strong alliances between junior and senior partners Lawless described were: Amol Deshpande with Ray Lane; Chi-Hua Chien with Ted Schlein; and Wen Hsieh with John Doerr.
“[Trae Vassallo] said the male partners gravitated toward someone, and it turned out to be a man. They went after guys. She wasn’t saying to me that they were sexist guys,” investigator Stephen Hirschfeld said, interpreting his notes from their conversation. “As it turned out they felt more comfortable with someone and it was a man.”
Vassallo also told Hirschfeld women weren’t given clear enough roles at meetings such as the 2011 company offsite and that “very little time was spent allowing women to sit in the middle or front rows,” Lawless said, reading through Hirschfeld’s notes and asking for confirmation.
“She didn’t say it to me that way,” Hirschfeld said. “She didn’t say that people literally go, ‘men, you sit here and women you sit in the balcony.’ She said, as it turns out, there weren’t as many women being actively involved as it turned out there were men.”
Lawless continued: “She told you that it really did seem all the male junior partners were sitting in the inner circle. She told you that she would have like to be invited to the dinner at Al Gore’s.”
Hirschfeld denied it all: “No she didn’t say that.”
“I’d like permission to read from the documents,” Lawless told the judge, as the defense’s attorney, Lynne Hermle, jumped in with an objection (hearsay!). Judge Kahn read over the notes, adjusted his glasses and looked at Hirschfeld.
“That’s what it says,” he said, looking perplexed.
“I’m trying to provide some context,” Hirschfeld said.
“But that’s what your notes say,” Judge Kahn repeated.
Hirschfeld begrudgingly read from his notes, which he now indicates are more his impressionistic take on the interview rather than quotes. In these notes, Vassallo had told him she was upset about being excluded from the Al Gore dinner and upset that no women were invited.
Women Make More Money for the Firm, Get Less Credit
Vassallo did a curious thing before her interview with Hirschfeld: she made a matrix of female partners and male partners comparing their profits and revenue per company.
In both cases, the women came out higher than the men. When Lawless brought it up, Hermle objected (triple hearsay!) but it was accepted anyway.
“Yes, she actually went through and made her own matrix,” Hirschfeld said.
Hirschfeld didn’t include it in his investigation over whether there was gender-based discrimination.
Lawless asked: “When Trae Vassallo was partaking in this interview, she told you that if you looked at the book value numbers, she was a lot more successful than some of the men … and that the men overhype the expected value to look more successful?”
Yes, Hirschfeld said.
“You didn’t feel that was important to the investigation?” Lawless asked.
“No,” Hirschfeld said.
Mary Meeker Had No Time for Whiners
Some women, such as famous Internet analyst and Kleiner partner Mary Meeker, thought the firm handled gender just fine, the defense pointed out. Meeker had spent many years on Wall Street before coming to Kleiner.
According to Hirschfeld: “I remember her saying, ‘I know Wall Street bad, this ain’t Wall Street. This is the nicest, sweetest tamest place,’” he said. “What she was saying to me was these guys are like choir boys, to the point of almost being boring or church-like. She was like, ‘This is the opposite of the Wall Street environment. It’s maybe even more staid than it should be.’”
Did the firm need to change and adapt? Absolutely.
“It was too sleepy. It needed to grow up and get tougher. She said, ‘we’re like a Seal team. We’re the best of the best,’” Hirschfeld said, laughing. “I remember this woman. She’s a piece of work.”
Pao testifies on Monday.
This article originally appeared on Recode.net.
