Reddit CEO Sues Prestigious VC Firm for Gender Discrimination and Sexual Harassment

Kleiner, Perkins, Caulfield & Byers (KPCB) is one of the most renowned venture capitalist firms in Silicon Valley. It’s known for helping launch Google, Amazon and AOL, and for providing the backup funds for numerous tech startups. It’s also known for being insular and male-dominated, as are other firms in the industry. That assertion is being tested this week because Ellen Pao, 45, is suing KPCB for being “discriminated against in the male-dominated culture.”

This is one of the most high-profile discrimination lawsuits to ever hit the world of Silicon Valley. Pao, the current CEO of Reddit, is suing for $16 million in wage losses after she was fired from her position in October 2012. KPCB’s attorneys maintain that Pao was fired because she was incapable of doing her job.

Pao’s story has gone viral, and venture capital and tech firms are now facing scrutiny over whether or not they’re truly discriminatory, based on the fact that there are few women in executive positions in those companies despite the fact that they have comparable backgrounds to their male co-workers. Pao is an example of that; she graduated from Princeton with an engineering degree and went to both Harvard Law and Harvard Business School. If Pao wins, the world of Silicon Valley will be significantly changed and challenged.

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Pao’s Allegations

The trial began yesterday in San Francisco. Alan Exelrod, Pao’s attorney, claims Pao was denied a promotion because of her gender, and that when she complained, she was let go. KPCB “used Ellen Pao’s talents for six years,” Exelrod said during the arguments, and whenever she was up for review, was continually passed over for advancement. He added, “When it came time to choose the next generation of leaders … Kleiner only chose men.” He pointed out that since KPCB was founded 40 years ago, only one woman has been promoted from junior to senior partner.

Pao filed the lawsuit in 2012, when she was a junior partner at KPCB, shortly after being fired. Pao alleges that she received sketches of nude women as well as erotic poetry from Randy Komisar, a senior partner. Pao also had an affair at the firm with Ajit Nazre, a colleague who was married. When she broke off the relationship, the suit claims he “interfered” with her work. When she reported the attacks, she said KPCB did nothing.

Kleiner Perkins’ Defense

The case has to prove that Pao was discriminated against and was held back professionally because she was a woman. Pao claims she was told not to complain when she brought her accusations up to management and that, afterward, she faced an disrespectful atmosphere and continually received bad reviews for her performance, which eventually led to her firing.

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As Wired reported, KPCB maintains she never reached an executive position because “she could not demonstrate the skills necessary for success as an investing venture capitalist,” and that she often had conflicts with both men and women while at work. They also claim the firing had nothing to do with gender and had everything to do with Pao being a poor worker. Today, Lynne Hermle, KPCB’s lawyer, said, “She did not have the presence, she did not have the sales skills, she was not a self-starter. She was not a zealous advocate. She wasn’t in the ballpark, she wasn’t even close.”

As for the affair with Nazre, KPCB  says they will reveal evidence that it was “consensual,” as Re/code reported.

Fellow Kleiner Perkins Partner Supports Pao’s Claims

The suit will put a big dent in KPCB’s defense if the jury finds that a witness for Pao, fellow colleague Trae Vassallo, was also harassed by Nazre and not promoted from junior to senior partner at the same time three fellow male junior partners were.

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Vassallo is well-known in Silicon Valley for having helped lead fundings for such companies as Dropcam and Nest. She left KPCB last year after not being included in the committee responsible for investments. The key factor in her corroboration is that she was known by everyone at the firm for being a “cooperative team player,” as Re/code also reported. At the same time, she felt disappointed over how the company handled her claims after she told them that Nazre kept making sexual propositions to her.

Vassallo first rejected Nazre’s passes in 2009, although she reported the issue two years later. What’s been brought to light in the lawsuit is that Nazre was Vassallo’s primary performance reviewer and KPCB did not listen to Vassallo’s request that he be necessarily taken off the assignment due to his advances. Pao’s lawyer claims that KPCB partner Ray Lane dismissed the assaults and said, “You should be flattered.”

With all eyes on KPCB, the firm will be on a difficult road to repairing its pristine luster no matter what the outcome of the case.

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