March 27, 2015 / 8:14 PM / in 3 years

Jury clears Kleiner firm in Silicon Valley gender bias case

SAN FRANCISCO (Reuters) - A California jury on Friday cleared venture capital firm Kleiner, Perkins, Caufield and Byers of gender discrimination claims brought against it by a woman former partner in a trial that transfixed Silicon Valley.

Ellen Pao leaves San Francisco Superior Court Civic Center Courthouse during a lunch break in San Francisco, California March 25, 2015. REUTERS/Stephen Lam

After further deliberation, the jury also cleared Kleiner on a claim that the firm had retaliated against former partner Ellen Pao by terminating her employment after she sued in 2012.

The verdict dashed Pao’s hopes for personal vindication, but the trial’s embarrassing disclosures about how Pao and other women were treated at Kleiner have cast a long shadow over Silicon Valley corporate culture and its lack of diversity.

The California Superior Court case laid bare the personnel matters of the firm that backed Google Inc and Amazon.com Inc, with Pao’s attorneys painting Kleiner as a quarrelsome pressure cooker where a former male partner used business trips as opportunities to make advances to female colleagues.

Pao, now interim chief executive at social-news service Reddit, claimed her standing at Kleiner crumbled after she ended a brief affair with partner Ajit Nazre. Her career deteriorated after he and Kleiner started retaliating against her, amid a climate that was overall unfriendly toward women, her lawyers argued.

The firm disputed those charges, presenting evidence that Kleiner went out of its way to hire women.

Pao sought to illustrate her point with testimony from former Kleiner partner, Trae Vassallo, who said Nazre appeared at her hotel room on a business trip. He wore a bathrobe and carried a glass of wine, according to testimony.

Kleiner countered that it investigated Nazre after Vassallo complained, after which he quickly left the firm.

Some witnesses, including Pao’s onetime mentor John Doerr, have testified that Pao’s lack of advancement stemmed from subpar performance, not discrimination or retaliation.

But Pao’s attorneys argued she laid the groundwork for the firm’s highly successful investment in RPX, the patent company, and suggesting an investment in Twitter, an idea more senior partners rejected at the time.

Pao herself testified for five days and faced tough questions both from Kleiner’s legal team and from jurors. One juror asked if it was “professional to enter into an affair with a married partner?”

“Going back I would not have done it again, but I didn’t think it was inappropriate at the time,” Pao said, emphasizing that Nazre had told her he was separated.

The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.

Additional reporting by Noel Randewich and Jim ChristieEditing by Peter Henderson and Grant McCool

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