Discrimination cases tend to be lurid, emotional, and nasty. (Think of the 1994 Michael Douglas film “Disclosure.” Not far from the truth.) They tend to take a toll on the lawyers involved, too. I know of one excellent plaintiff’s lawyer here in New Jersey who turns down something like 80% of the potential plaintiffs who come to her. Part of that is financial, of course; a plaintiff’s attorney working on contingency wants to take only the cases that hold the reasonable prospect of a large bonus at the end. But I bet part of it is also emotional. Trial work can be exhilarating, but it’s also exhausting and draining, and can damage your health and your family relationships. As for “seeking justice,” a wise lawyer once told me that, in reality, the only “justice” in the Halls of Justice takes place in the halls. (In other words, settle!)
That’s why, even though most of my exposure to employment trials is on the insurance coverage end, I’m always fascinated by plaintiffs and plaintiffs’ lawyers willing to go to the mat. Such was the circumstance in the recent discrimination trial of Ellen Pao v. Kleiner Perkins, which took place in California and got a lot of attention in the press and social media. Ms. Pao, who is now the CEO of Reddit, had been a junior partner at a venture capital firm (Kleiner). She claimed that she had been discriminated against by the “old boys” network, and that the discrimination included being passed over for promotion, being subjected to a locker room atmosphere, and eventually being terminated.
Now, lots of objective evidence tends to indicate that there’s a glass ceiling in the business world, especially in the technology and financial services sectors. The share of women partners in venture capital firms, for example, has declined to 6% in 2014, down from 10% in 1999. Women’s representation in computer occupations has declined since the 1990s, with women filling just 22% of software developer jobs. 77% of venture capital firms have never had a female partner (a point made by Kleiner’s expert, a Harvard business school researcher, who also testified that Kleiner had the best track record of hiring women of any major venture capital firm in the country – kind of like being the tallest person at a “little people” convention).
So why, specifically, did Ms. Pao lose? Let’s look at some theories and aspects of the case.
First issue: The theory that Ellen Pao was a “bad witness.” Look, all trial lawyers have had witnesses who didn’t perform as well as we had hoped. Example: My former partner once tried an environmental insurance coverage case. One of the owners of our client company was a very professional female. When my partner came back from Court one day, I asked how the client had testified. He was distraught, and said that she had dressed like, and come across like, Uma Thurman in “Pulp Fiction.” Not good! We didn’t see that coming, and from that date forward I’ve had serious discussions with all of our witnesses about how to dress and act in court – even the professionals.
In the Pao case, some pundits have suggested that Ms. Pao wasn’t assertive enough, or confident enough. Patricia Sellers of Fortune Magazine wrote: “I don’t know Pao well, but in 2011 she was on a panel that I moderated. I recall wondering to myself at the time how a woman so reticent and obviously insecure could have advanced so far in fiercely competitive Silicon Valley.” (Before we agree that Ms. Pao is “reticent” or “insecure,” keep in mind that she graduated from Princeton with a degree in engineering, and from the Harvard Law School.)
I’m not buying it. If Ms. Pao were mousy and unassertive, wouldn’t that make it more plausible to a jury that she was discriminated against, because she wouldn’t have had the gumption to complain about, or resist, a toxic atmosphere?
Comments from the jurors who agreed to be interviewed are illuminating. One (a 51-year-old female who was an alternate juror) said the case came down to an analysis of performance reviews – and, perhaps most importantly, doubt in Pao’s trustworthiness (not her assertiveness). This juror said: “The environment definitely is biased against women in technology, and venture capital is even worse [but] I didn’t find her as credible as she should have been.” Credibility is crucial in every case, but especially here, where Ms. Pao’s case boiled down to her own word against the denials of the Kleiner partners, as well as the mixed performance evaluation. There was no “smoking” gun memo or e-mail.
That leads to the next question: What made Ms. Pao appear to be not credible? We’re reading tea leaves a bit, but there are a few glaring factors that I suspect the jury had difficulty overcoming. For one, Ms. Pao was making $500,000 per year when she was terminated in 2012, which was more than her male junior partner peers, and probably a lot more than some or all of the jurors. That really shouldn’t matter, because the real question is, why was she turned down for further advancement? But in many peoples’ minds, I suspect that it would matter.
Also problematic, perhaps, is the fact that she had had an affair with one of the married partners at Kleiner. She said she broke it off when she learned he had not left his wife as he told her he had. I’m guessing that the affair didn’t help her cause, and I’m also guessing that her asserted unawareness that her lover was still living with his wife didn’t help, either. I am not saying that she was lying. I’m only suggesting that her story may not have made logical sense to some of the jurors. In a hotly contested legal battle, a party’s apparent small lapse in logic can be enough to lose the case. This also points out how difficult it is for a truly aggrieved discrimination plaintiff to withstand the process. Uncomfortable details about personal life end up under a searchlight.
There was also evidence at the trial that Ms. Pao had participated in a 2011 business trip to New York on a private plane, with several Kleiner partners. Ms. Pao said that the men’s discussion included reviews of “hot” porn stars and the topic of dating younger women. (Lovely.) One of the Kleiner partners testified that Ms. Pao didn’t complain about anything that was discussed on the plane ride, until much later. That fact could have been problematic at trial – although, while Kleiner may have portrayed Ms. Pao’s silence as acquiescence, it’s equally likely that the locker room atmosphere intimidated her from reporting these issues. (Also, to whom would she report them? The partners who condoned and participated in the behavior?)
Evidence also emerged that Ms. Pao maintained a Nixonian “resentment chart” of colleagues who, she believed, had wronged her. If true, that’s a little creepy; and creepiness can lead to jurors not liking the witness, which can lead to a loss.
Finally, Ms. Pao was mentored and (initially) protected by billionaire John Doerr, one of the most powerful partners at Kleiner. (Doerr is an acquaintance of President Obama.) Ms. Pao had joined Kleiner in 2005 as Doerr’s Chief of Staff. If she were Doerr’s protegee, and he elected not to protect her in the end, jurors could have concluded that her termination was in fact performance-based, and had nothing to do with the old boys’ network.
Second issue: The impact of evidentiary rulings from the court. How many times have I heard – usually from clients who haven’t had much experience with the joy of the litigation system – that they have the better case, and all they have to do is get before a jury or judge? All I have to say is, be careful what you wish for. Everyone who tries cases has lost cases that were winnable, and has won cases that were eminently losable. As the Tom Cruise character said in “A Few Good Men,” “It doesn’t matter what I believe. It only matters what I can prove.”
In the Pao case, Judge Harold Kahn gave the jurors 14 pages of instructions, 7 pages of questions to answer, and a mandate to decide whether Kleiner had been biased against women in 2012. (Ms. Pao first officially complained about gender bias in December 2011.) The questions presented to the jury were focused and limited to the issue of why Ms. Pao was not promoted at a specific point in time. There was no larger issue involved. None of the jurors who were interviewed talked about how their decision might affect “the venture capital world or Silicon Valley in general.” Had Ms. Pao’s lawyers been able to broaden the scope of inquiry – by getting the jurors to focus on the hostile work environment at Kleiner in general, more than on the treatment of Ms. Pao specifically – the outcome could have been different.
Jozef Stalin is reported to have said: “Those who cast the votes decide nothing. Those who count the votes decide everything.” A variant of that is very true in trial law. Trials are a battle over theme. Get the presiding judge to accept your theme of the case as opposed to your opponent’s, and the questions that go to the jury may present an insurmountable obstacle for the other side. That appears to have happened in Kleiner’s favor here.
Third issue: The dangers of the “crusade” mentality. We humans all tend to fall in love with our own stories. But that shortcoming can be especially fatal for a trial lawyer. (That’s why we use focus groups and mock trials at my firm on any large case.) Here, supporters of Ms. Pao have claimed that, although she lost, she “elevated awareness.” Deborah Rhode, a law professor at Stanford University, is quoted in the New York Times as saying that the case will “prompt a debate” about women in technology and venture capital. According to Professor Rhode: “This case sends a powerful signal to Silicon Valley in general and the venture capital industry in particular. Defendants who win in court sometimes lose in the world outside it.”
I mean no disrespect to Professor Rhode, but to me, all this business about “elevating awareness” is just silly. Kleiner won the case (to the extent that these types of cases can be “won”), and the jurors agreed that they were only focused upon whether Ms. Pao was discriminated against, not on making some grand statement of public policy. As Felix Frankfurter once famously said: “Litigation is the pursuit of practical ends, not a game of chess.”
Perhaps Kleiner will be more careful in the future about how it treats women. (As the father of a daughter, I sure hope so.) Perhaps not. One thing I can tell you after three decades of litigation practice, though, is that an overworked Court is often a terrible place to attempt to create policy or effect a change in the public’s thinking. Litigation is time-consuming, stressful and expensive (this lawsuit was a three-year ordeal). Kleiner’s legal bills were likely staggering, and both Ms. Pao and her lawyers came away with nothing. (Her attorney could not even afford transcripts of the trial.)
So my read on this is that, in actuality, everyone lost. If the trial “increased awareness,” the “awareness” is about how dysfunctional our Court system can be.
The real lesson is this: If you’re in management, unless you like throwing money away, think about how to avoid litigation – not about how to get into it. To the extent this trial served a broader purpose, that’s it.
- Gene Killian