Business Technology

Wednesday 26 October 2016

Sexism case turns spotlight on Silicon Valley firms

Josie Ensor

Published 09/04/2015 | 02:30

Ellen Pao, former junior partner at Kleiner Perkins Caufield & Byers, exits state court in San Francisco
Ellen Pao, former junior partner at Kleiner Perkins Caufield & Byers, exits state court in San Francisco

It was always going to be a long shot. Ellen Pao had sued her former employer - Kleiner Perkins Caufield & Byers, one of the most storied venture capital firms in America.

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Pao claimed the company had denied her a promotion because of her gender and ultimately fired her. At the end of last month she lost her case.

Very few alleged sexism cases against Silicon Valley companies make it to court; many are restricted by gag orders or persuaded to accept out-of-court settlements. By speaking out, Pao became one of only a few women to publicly take a stand.

She told the jury that she filed the suit because she "wanted something to change" in the technology industry, where some claim that misogyny has become so pervasive it has been likened to the high octane Wall Street of the 1980s.

Sure enough, and despite the outcome, the case highlighted the issue of sexism in the technology industry

"I have told my story and thousands of people have heard it. My story is their story," Pao said after the decision.

"If I've helped to level the playing field for women and minorities in venture capital, then the battle was worth it."

The 45-year-old had sued the company, where she had worked from 2005 until she was fired in 2012 shortly after filing the lawsuit, for $16m (€14.7m) in back pay and loss of future earnings.

The judge then ruled to allow her to seek punitive damages of up to $160m if it was found the company acted with malice.

The case gripped the public, offering a rare look under the hood of one of the most powerful and private of industries in America.

The 'New York Times' made the verdict its lead story on what was a busy news day, and the hashtag #thankyouellenpao became one of the most popular on Twitter in the United States. The court of public opinion appears to have disagreed with the jury.

"#ThankYouEllenPao for agreeing to be the public face of a pervasive problem that affects us all," Christina Xu wrote from China.

"Culture changes slowly but god dammit it will change," one user in San Francisco tweeted. "Ellen Pao's choices reverberate and they will make a difference."

The trial had to move courtrooms several times to accommodate the vast numbers of people wanting to attend.

Reporters, bloggers, lawyers and spectators alike crowded in to watch the David-and-Goliath battle play out in San Francisco's Superior Court.

Sue Decker, former president of Yahoo!, even took her daughters out of school to watch the closing arguments.

"More and more women are starting to 'lean in' and take responsibility for changing the waters," Decker said.

"And for my daughters, I think it was well worth the day of hooky to see this process in action. They saw that the waters are changing, and that sometimes it takes a moment of disruption for people to see with more clarity."

When Yahoo!'s Decker talks about "leaning in" she is referring to Facebook's Sheryl Sandberg's 2013 autobiography, which has become something of a feminist manifesto for the women of Silicon Valley.

Don't people-please, assert yourself more and always negotiate what you want, is the advice she gives.

The strategy certainly worked for Sandberg, and for a few others at the top, including current Yahoo! president Marissa Mayer, and Meg Whitman, the president of Hewlett-Packard, but when Pao leaned in she claims she was labelled aggressive and territorial.

Pao, who is now the interim chief executive of message board site Reddit, told the court: "The behaviour that was acceptable for men was not acceptable for women."

Many Silicon Valley companies pay lip service to the issue of diversity. But the numbers don't lie. These show it has long been difficult for women to reach top positions, particularly in the venture capital industry.

In fact, women are losing ground: only 6pc of VC partners last year were female, down from 10pc in 1999.

The figures are just as bad in the wider industry. According to diversity data released by Google and Twitter last year, only one in 10 of employees in tech roles are women.

Some blame a shallow talent pool, but women make up more than 40pc of all engineering graduates in the US, yet hold only around 15pc of technical jobs.

But not all women in the industry have cheered Pao on.

Carol Roth, a former banker, investor and author of 'The Entrepreneur Equation', believes the case will only prove a further setback for women.

"Just from her bringing such a lawsuit to bear - she actually creates an additional handicap for women to overcome," she contends

. "Why hire someone who you are concerned could sue you by playing the gender card if things didn't work out?"

Melinda Riechert, managing partner in the Silicon Valley office of law firm Morgan Lewis, agreed, telling 'The Daily Telegraph' she worried that it will make men feel that "being nice to and mentoring and trying to be a good person toward women colleagues - they, too, will be hauled before a jury".

Indeed, in the past week, both Facebook and Twitter have been hit with their own sex-bias lawsuits, with the female employees claiming that they were treated differently to their male counterparts, and were punished by "secret" promotion practices.

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