As Ellen Pao gets her day in court, Valley investors still support those who harass and abuse women
The message, at least from the assembled media, was clear. The court was not simply sitting in judgement on if a single employee was sexually harassed by a partner at the Silicon Valley office of one of the world's most powerful firms. Rather, an entire industry was on trial for how it treats female employees, from the highest paid partners to the most menial support staff.
The plaintiff's claims were simple enough to understand: She had been blocked from the opportunities afforded to her male colleagues, while simultaneously being forced to endure unwanted sexual advances from co-workers. Management, of course, refused to do a damn thing about any of it.
But judgement day was nigh. The plaintiff was represented by Alan B. Exelrod, a giant in the field of discrimination and employment law. Mr Exelrod was the best, and most experts predicted that the trial would result in a huge payout for the plaintiff, and what hacks like me likes to describe as a "wake up call" for an entire industry.
The year was 1994.
And the assembled legal experts were right.
Almost two decades ago, the jury in the sexual harassment case of Weeks vs Baker McKenzie awarded legal secretary Rena Weeks more than $7 million in damages for the harassment she suffered at the law firm of Baker McKenzie. The amount was reduced by half on appeal but the case, and the countless harassment victims at other firms who later followed Ms Weeks' lead, caused the legal profession to realize, in the words of one expert, that they couldn't "behave like little boys anymore."
Given the similarities between that case and today's opening arguments in the matter of Ellen Pao vs Kleiner Perkins, I hope you'll forgive my cliched bait and switch lede. There's very little in today's coverage, including the name of Pao's lawyer, which wouldn't belong in reporting of the Weeks case almost two decades ago. As our friends at Re/Code breathlessly described the scene...
VCs in Bathrobes, Women Asked to Play Secretary, Angry Texts: Day One of Pao v. Kleiner Perkins...
[I]f the opening arguments today were any indication, this trial will be a ferocious one. There will be intimate details from both sides and little room to compromise. And there was an unexpected star witness who testified to her own experience with sexual harassment at Kleiner Perkins: Former partner Tracy “Trae” Vassallo. Kleiner would like us to believe that, technically, this is a case about discrimination and not harassment. But the surprise appearance of Trae Vassallo -- the only real shocker on day one, sexy headlines not withstanding -- only serves to underline the similarities with Weeks. In the Weeks case, several other employees of Baker McKenzie came forward during the trial to allege that they had been harassed by the same partner, Martin R. Greenstein. Today, Ms Vassallo alleged that she too had been harassed by the same partner who Ms Pao claims pressured her into a relationship: Kleiner partner Ajit Nazre. (Mr Exelrod's involvement in both cases seems like a neat coincidence except... well, wouldn't you want the guy who got $7 million, or even $3 million for Rena Weeks on your side?)
The question, then, is whether the similarities will hold true throughout the rest of the trial. Not in terms of the verdict -- no news outlet has yet found a legal expert who doesn't predict a big payout for Ms Pao -- but rather in terms of changing the culture in Silicon Valley, the way Weeks triggered real change in how women are treated in the legal profession.
It's on that question that things get slightly more complicated. Regardless of the outcome of Pao's suit, you can be sure that every Valley VC firm is currently reviewing its policy on sexual harassment. In closed-door meetings up and down Sand Hill Road, stern talks are likely being had with partners known for being a little over friendly with the opposite sex. 2015 is likely to be a banner year for female partners finally getting the promotion they deserve. Huzzah for that, at least.
And yet, as we've reported ad nauseum here on Pando, the real problem Silicon Valley investment firms have with their treatment of women exists externally, not internally. While the treatment of Ms Pao and Ms Vassallo, if proven, is indisputably shocking, just as stunning is the fact that Kleiner remains an investor in Uber, a company whose senior executive team threatened to spend a million dollars attacking at least one female journalist, including targeting her family. (That journalist, of course, is Pando's Sarah Lacy). Meantime, Uber has been accused by women in cities around the world of facilitating assaults, abuse and even rape. Just this month, Twitter's Joy Ding alleged that a "male friend who interviewed at Uber asked about gender diversity & got the answer 'Our recruiters are so hot.'"
Kleiner is also an investor in Snapchat, whose founder Evan Spiegel was forced to apologize after leaked college emails showed him talking about peeing on girls and wanting to have sex with "sororisluts."
Kleiner's response to the treatment of women by those in whom it invests: Zip. Remarkably, their investment in Snapchat came after Spiegel's emails were leaked, not before.
In that regard, at least, the firm certainly is representative of a Valley-wide gender problem. In recent years we've seen the rise and rise and rise-rise-rise of the brogrammer and of VCs continuing to back companies and entrepreneurs whose behavior is worse than anything alleged by Ellen Pao. No matter how many gender-related scandals engulf Uber, not a single Valley investor has turned its back on the company, either by refusing to participate in future funding rounds or even just publicly criticizing the company's management. Similarly, firms like Kleiner continued to pour money into Snapchat long after Spiegel's emails became public.
Even where founders are forced to leave following claims of gendered harassment or even assault -- Tinder's co-founder Justin Mateen, Urban Airship's founder Scott Kveton, Radium One's Gurbaksh Chahal all spring readily to mind -- there are little to no consequences for the investors who agreed to back them in the first place. A new leader is installed and the money keeps flowing to everyone involved.
The only example I can think of where a firm has claimed that they were dumping a successful company due to its treatment of women is when Google Ventures leaked that it was abandoning Bustle due to Bryan Goldberg's awkward New Yorker profile in which he was photographed leaning his laptop on a female employee's legs. Unfortunately, as we reported soon afterwards, the real reason for GV pulling out of Bustle had absolutely nothing to do with gender. And, of course, Google Ventures remains a proud investor in Uber.
Regardless of how much Kleiner might ultimately be forced to pay Pao, it'll be a fraction of a fraction of how much they stand to make by continuing to back Uber or Snapchat.
None of which is to diminish Pao's claim and it certainly isn't to suggest that, as a partner in Kleiner, she is personally responsible for what Uber does, or the emails the Snapchat founder sent in college. But whereas Weeks vs Baker McKenzie was a meaningful first step towards fixing the legal profession's serious gender problem, we shouldn't assume that, per se, Pao vs Kleiner is going to do the same for venture capital in Silicon Valley.
In fact, there's a risk that the inevitable housecleaning that will occur inside VC firms after this trial ends might allow the industry to kid itself that's it's now doing everything it can to support women. Kidding themselves, after all, is something Valley investors have proved themselves extremely good at, especially when it comes to the misdeeds of the men -- overwhelmingly men -- they continue to fund.
The only way Pao vs Kleiner will be as significant as Weeks vs Baker McKenzie is if it forces the Silicon Valley venture capital industry to stop condoning and encouraging the appalling mistreatment of women outside its offices, not just inside.
[Art by Brad Jonas for Pando]
[H/t to Janine Yancey, President of Emtrain, who was the first to describe to me the similarities between the Pao case and Weeks vs Baker McKenzie. I've asked Yancey to write a guest post expanding on those similarities.]