Low-tech sexism in America's high-tech heartland sees $16m gender discrimination court case

An unfair dismissal case highlights Silicon Valley’s gender imbalance, from all-male activities and porn banter to pressure to have a relationship

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For all its promises of a bright technological future, Silicon Valley’s corporate culture seems mired in a less progressive past – at least according to a landmark $16m (£11m) gender discrimination lawsuit now playing out at San Francisco’s superior court.

Ellen Pao, who spent six years as a junior partner at the venture capital firm Kleiner Perkins Caulfield & Byers, took the stand last week to recount her experience of what she claims was systemic sexual discrimination and harassment in the boys’ locker room atmosphere of a leading Silicon Valley investment firm.

Ms Pao, 45, claimed female junior partners were frequently excluded from all-male activities at Kleiner Perkins, which earned its reputation as an early investor in future tech giants including Google and Amazon. Her male colleagues, she alleged, would banter about porn stars, while a senior partner gave her a sexually explicit book as a Valentine’s Day gift.

Women were not invited to a dinner hosted by Kleiner Perkins for the former US vice-president Al Gore, who at the time lived in the same building as Ms Pao. It was suggested, she said, “that if there were women there, the conversation would be tempered … because women kill the buzz”.

In the dog-eat-dog environment of venture capital, Ms Pao told the court, “the behaviour that was acceptable for men was not acceptable for women”. Criticised by her bosses for being too quiet, she said: “If I did talk, I was being ‘too competitive’ or ‘sharp-elbowed’.”

In 2006, shortly after joining the firm, Ms Pao said she felt “pressured” into having an affair with a married senior colleague, Ajit Nazre. When she broke off the relationship, she claims, Mr Nazre used his standing at the firm to punish her professionally – and, after she complained about him to management, she was denied a promotion to senior partner. She was fired in 2012. 

Many observers are amazed Ms Pao’s case has made it to trial at all. Last year a sexual harassment suit brought against the dating app Tinder by its co-founder, Whitney Wolfe, was settled out of court. Ms Wolfe alleged her fellow founder and ex-boyfriend Justin Mateen sent her abusive text messages and stripped her of her co-founder title because, he said, having a woman on the board made Tinder “seem like a joke”.

In 2013, Kleiner Perkins’ rival venture firm CMEA Capital was hit with a sexual harassment suit from a handful of female former employees, who claimed a senior executive would assign them sexual nicknames and trap them in his office, where he made lewd innuendos. CMEA, too, settled out of court.

Ms Pao’s case has put a spotlight on an issue hitherto confined to the shadows of the tech business. Silicon Valley has several top female executives, notably the Yahoo chief executive Marissa Mayer and Facebook’s chief operating officer, Sheryl Sandberg, but according to a recent report by the law firm Fenwick & West, women occupy a mere 11 per cent of executive positions.

The number of female partners at venture capital firms like Kleiner Perkins is approximately 6 per cent and sinking. While more than a third of US businesses are majority owned by women, research by Babson College found that fewer than 3 per cent of firms offering venture funding have a female chief executive. In court, even Ms Pao’s former boss, John Doerr, admitted that the level of gender diversity in the venture capital world was “pathetic”.

Ms Pao, who earned $560,000 a year in salary and bonuses at Kleiner Perkins, said suing her former employer for only a small amount would make little impression on a business with $7bn under management. “If it was a large number,” she said of her $16m suit, “it would be something they’d have to talk about, and I hoped that would drive some accountability and change.”

The firm’s lawyers argue that Ms Pao misconstrued many of the incidents outlined in her testimony. That sexually explicit Valentine’s gift, for instance, was a signed copy of The Book of Longing by Leonard Cohen, which contained “erotic poetry” and “sketches of naked women”. But senior partner Randy Kosimar said he gave Ms Pao the book at his wife’s suggestion, because Ms Pao teased him about being a Buddhist, and the book’s cover noted that Cohen was a Buddhist.

The defence claims Ms Pao was let go not due to her gender, but because she failed to display the business qualifications and interpersonal skills necessary to rise and thrive in the venture capital world.

Ms Pao, currently the interim chief executive of Reddit, she said she believed other companies were reluctant to employ her because they feared repercussions from Kleiner Perkins.

The trial continues.