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Ellen Pao’s discrimination lawsuit against Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers promised to be the employment law story of the year. Newspapers and blogs publicized the trial’s tawdry anecdotes about the inner workings of a tech institution. Many thought the case would be a referendum on the “boys’ club” atmosphere in top-tier Silicon Valley firms.
But after all of the build-up and daily drama of the trial, the verdict landed with a thud: An across-the-board loss for Pao on every claim. Executives in high-tech businesses may well have sighed in relief, thinking, “Now this can’t happen to me.”
But they would have been wrong. The Pao verdict shouldn’t give any employer, whether in the high-tech world or elsewhere, a false sense of confidence about these kinds of lawsuits. Rather, the Pao case remains a cautionary tale that employers should heed when dealing with their own employees.
Pao, who spoke about the case at last week’s Code conference, and announced this week that she plans to appeal, lost her case because of its unique flaws, and not because the jury decided that no “boys’ club” atmosphere existed at Kleiner Perkins. Her case was founded in large part on her affair with a co-worker and the post-breakup problems that ensued. But Pao’s credibility was undercut by the evidence that when firm executives sought to address her concerns with the co-worker, she told them to fire a female co-worker, rather than the subject of her affair.
Pao was also cross-examined about an unusual “resentments chart” on her computer, in which she listed all of the grievances held against her colleagues. According to post-trial interviews, jurors heavily relied on Pao’s performance reviews, which were consistently negative. Finally, Kleiner Perkins’ skilled trial counsel used the timing of Pao’s complaints to paint her as opportunistic.
Because it was driven by the particulars of her individual case, Pao’s resounding defeat provides little insight into the question of whether Silicon Valley has a discrimination problem. Nor does it predict how other similar lawsuits — such as those facing Facebook and Twitter — will turn out. Thus, it would be foolish to assume, based on Pao’s loss, that a future plaintiff in a gender discrimination case alleging a double standard for men and women won’t achieve a very different outcome.
Indeed, the Pao trial, and the massive media and public interest it generated, made at least one thing very clear: Whether or not Silicon Valley has an actual discrimination problem, it clearly has a perceived discrimination problem.
Tech companies should take a hard look at where gender stereotyping might be seeping into the promotion process and promote meaningful steps within their organizations to avoid that infiltration. They should also make sure not to exclude women from important networking opportunities, such as the dinner with Al Gore that Pao wasn’t invited to join and then made a centerpiece of her case.
Gender biases can be subconscious and perhaps invisible to those who are directly engaged in the process. As such, companies large and small can never assume that they don’t have a problem. And this is not just a Silicon Valley issue: Any company that relies on subjective reviews of employee performance to make its promotion decisions could well be dealing with similar biases.
At the very least, employers should put in place training programs for decision makers that teach them how to avoid stereotyping. They should also clearly articulate objective promotion criteria that will more easily hold up if they ever fall under juror scrutiny. While these steps might be costly, and even unwelcome, they are essential for reducing bias and subsequent litigation risk. Pao could have won more than a hundred million dollars if she prevailed, and Kleiner Perkins must have spent huge sums in its own defense: Its expert witnesses alone cost it $850,000. In this area, an ounce of prevention is definitely worth a pound of cure.
Pao’s case offers one more lesson about the downside — for both employer and employee — of failing to resolve a discrimination dispute prior to a public airing of grievances. In the trial, Pao’s former colleagues publicly criticized her performance and personality, while Kleiner Perkins partners devoted significant time to preparing for and testifying in a trial that aired both the firm’s dirty laundry and its economics. While the firm walked away from the battle as the clear winner, neither side left unmarked.
Jason M. Knott is a partner at Zuckerman Spaeder LLP in Washington, D.C. He is the contributing editor of the firm’s blog, Suits by Suits, which covers disputes involving employers and executives. Reach him @jasonmknott.
This article originally appeared on Recode.net.
