What’s at Stake in Kleiner Perkins’ Silicon Valley Sex-Bias Case

iStock/Thinkstock(LOS ANGELES) — The sex discrimination case against one of Silicon Valley’s biggest venture capital firms has placed the spotlight on the region’s perceived gender imbalance, with millions of dollars and high-profile reputations at stake.

At the center of the lawsuit and court case is Ellen Pao, 45, the interim CEO of Reddit and former partner of Kleiner Perkins Caufield & Byers. She filed her complaint in May 2012 against the prominent venture capital firm, which is based in Menlo Park, California, near the headquarters of Facebook, one of the many tech firms in which it has invested.

Pao’s attorney Therese Lawless urged the jury to make a decision that will send a message to the venture capital industry.

Here’s what you should know:

Accusations of Harassment

Kleiner Perkins hired Pao in June 2005 as chief of staff for one of the managing partners, John Doerr. After working at a handful of technology firms and a law firm, her title with Kleiner was junior partner. Pao studied electrical engineering at Princeton and went to Harvard Law School and Harvard Business School.

“She was told if she was successful in this role, she would move to a full-time investing role after three years,” according to her lawsuit.

In her suit, Pao said another partner who is no longer with the firm made “inappropriate sexual approaches” during a business trip to Germany in February 2006, and she “rebuffed his advances.”

From March to October 2006, that former partner, Ajit Nazre, allegedly pressured Pao to “have a sexual relationship with him” and falsely told her that his wife had left him, the suit said.

Pao “eventually succumbed to Mr. Nazre’s insistence on sexual relations on two or three occasions,” but in October 2006 she told him she would “no longer have a personal relationship with him,” the suit says.

The jury will decide if Kleiner discriminated against Pao because she’s a woman, if it took reasonable steps to prevent discrimination, if any, and if the company retaliated against her for complaining.

Kleiner Perkins has denied all of Pao’s claims in court. Nazre could not be reached for comment.

Retaliation Allegations

Over the course of five years, Nazre “engaged in retaliation against” her, including excluding her from “numerous” business meetings and removing her from business email discussions where she had initially been included,” the court filing stated.

Pao alleges that she repeatedly complained to superiors about this treatment but was told “that she should just accept it,” the suit said. She also alleges “inappropriate” behavior by other male employees. The firm has said that Pao didn’t complain about alleged harassment until late 2011.

Six months after filing suit, Pao was fired in late 2012, which Pao said was in response to her lawsuit, while the firm claims she was fired for her performance.

Christina Lee, a spokeswoman for the firm, said in a statement to ABC News, “This suit is completely without merit and has no basis in the law. KPCB has a well-established record of championing women in our firm, our portfolio companies and the overall industry. We look forward to clearing our name in court.”

Alleged Inappropriate Behavior

In one alleged example, on Valentine’s Day in 2007, a senior partner came into Pao’s office, the suit states. He gave her a book called Book of Longing, by Leonard Cohen, which contained sexual drawings and poems with “strong sexual content,” and invited her to dinner, explaining that his wife would be out of town, the suit states. The firm has stated that Pao never previously complained about the book and that it had been purchased by the partner’s wife and was given because of a shared interest in Buddhism.

Alleged Unequal Treatment Toward Women

The suit said Pao “believed that the retaliation and gender discrimination were affecting her compensation at KPCB, because women generally were not treated equivalently or promoted to Senior Partner based on their gender.”

Pao alleges she was criticized during performance reviews for qualities that male employees were praised for, such as being “aggressive,” according to the lawsuit. On the stand, one of the supervising partners, Ted Schlein, said Pao was “entitled,” “territorial” and that big-picture thinking “wasn’t part of Ellen’s genetic makeup,” according to Re/Code.

Kleiner Perkins says that 20 percent of its investing partners are women, compared to the industry average of 6 percent, which comes from the “Diana Report: Women Entrepreneurs 2014,” from Babson College.

What Could Happen

Along with the issue of whether the firm is liable, the jury must decide whether Pao should receive past and future lost earnings. The judge already ruled that Pao can seek punitive damages.

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