The Lawsuit that Got Our Attention: Ellen Pao’s 2015 Case Against Workplace Discrimination & Harassment in VC

By Constance Gamache (Research Lead) and Madison Hofert (Undergraduate Researcher)

Summary:

With the recent rise of the rise of the #MeToo movement, many industries now face large public cases of workplace discrimination and harassment. For the VC industry, however, this moment came four years ago, in 2015. 

Ellen Pao, former employee of VC firm Kleiner Perkins Caufield & Byers, filed a gender discrimination suit against Kleiner Perkins in 2012. Pao had been with Kleiner Perkins since 2005, and alleged that she was denied promotions, kept out of meetings, and received unwanted sexual advances from colleagues due to her gender. Pao sought $16 million in damages for unmade earnings due to her early termination and discrimination. 

When the case went to trial in early 2015, news outlets like the New York Times, Wall Street Journal, and TechCrunch reported extensively on the proceedings and its implications for the industry. Many sources noted that it was extremely unusual for cases like Pao’s to go to trial; most discrimination cases were settled privately in order to avoid the scrutiny of a public trial. Pao, however, refused to settle. Upon losing the case, Pao tweeted the Toni Morrison quote, “If you are free, you need to free somebody else. If you have some power, then your job is to empower somebody else.” Her case prompted increased discussion of VC’s lack of gender diversity across the country.

Since 2015, Pao has occupied several other prestigious seats in Silicon Valley. First as interim CEO of Reddit, Chief Diversity and Inclusion Officer at Kapor Capital, and now co-founder and CEO of Project Include, an advocacy group for diversity in VC and Tech.  

Takeaways:

• Question natural/unconscious tendencies and biases: A superior male performance in VC firms could be due to gender-exclusive collaboration; women in VC firms simply have fewer in their tribe
• Consequences of implicit biases: A seemingly harmless male-to-male association or preference within a VC firm can quickly become insular, affecting women and minorities both professionally and personally (Ellen Pao lost her job over this!) 
• “The Second Sex”: According to Simone De Beauvoir, women operate in the world as “the second sex” (men are the primary sex); the VC industry has an opportunity to lean into greater cultural awareness, utilizing its reputation of challenging the status quo for good

Additional Reading: 

• *What Silicon Valley Learned From the Kleiner Perkins Case, by Claire Cain Miller for the New York Times, March 27, 2015
• What’s Really At Stake in Ellen Pao’s Kleiner Perkins Lawsuit, by Emily Bazelon for the New York Times Magazine, February 25, 2015
• Ellen Pao: I Won’t Appeal My Case Against Kleiner Perkins, by Connie Loizos for TechCrunch, 2015
• Gender Effects in Venture Capital, by Paul A. Gompers for the Harvard Business School, June 4, 2014

*Denotes Key Source