Can the NFL solve gender inequality in Silicon Valley?
- AUTHOR Megan Geuss
- April 6, 2015
- No Comments
When jurors returned from deliberation in San Francisco Superior Court last week, they somberly delivered a verdict rejecting all of the gender discrimination claims that former junior partner Ellen Pao had made against VC firm Kleiner Perkins. For some of those outside of the courtroom, this was a surprise—over the course of the five-week trial, Ellen Pao had become almost a folk hero, fighting against the status quo that’s kept a lot of women out of investing roles and the boardroom since the dawn of the industrial revolution.
For those inside the courtroom, the verdict was less of a shock. The trial left no one unsullied, but Pao’s case came down to her own word against a cadre of Kleiner partners’ denials, as well as a flurry of mixed performance reviews. The plaintiff’s attorneys had a difficult time showing that Kleiner Perkins partners had unscrupulous opinions about women when they took the stand, and no smoking gun appeared that Kleiner couldn’t cast doubt on with a well-placed “I don’t recall.” Kleiner took advantage of Pao’s side’s weaknesses by questioning why Pao would want to take this trial all the way to a courtroom instead of finding an equitable solution for herself and her fellow female coworkers outside of court.
How subtle does bias have to be to not exist?
Since the verdict, much ink has been spilled over why Pao lost. Was Pao an imperfect plaintiff? Were Pao’s claims too gray for the black-and-white of a jury trial? Was the boys’ club atmosphere described by Pao simply a figment of her imagination, made up of a mountain of perceived slights?
Throughout the trial and then after it, no one—not the couple of jurors who had agreed to be interviewed after the verdict came down, or even Kleiner Perkins itself—said that women did not experience discrimination in Silicon Valley. Kleiner even brought in paid expert Paul Gompers, a Harvard Business School researcher, to testify on the dismal status of women in venture capital. His research (PDF) showed that 77 percent of all venture capital firms have never had a female partner.
Gompers also testified that Kleiner Perkins had the best track record for hiring women of any major VC firm in the country.
The numbers quoted to back up allegations of discrimination in entrepreneurship are stark: ASeptember 2014 study from Babson College (PDF) showed that just 6 percent of all partners at venture capital firms were women—down from 10 percent in 1999. The same study found that, although women are majority owners of 36 percent of all businesses in the US, only 15 percent of some 6,700 venture-capital funded companies had a woman on the executive team, and only 2.7 percent of those companies had a woman CEO. So it’s not that there aren’t women ready to go into business, but venture capital doesn’t reach them.
Even Lynne Hermle, Kleiner’s lead counsel on this case, told the Mercury News, “This is the right issue and the right time but the wrong case.”
In post-trial interviews, several of the jurors, like 62-year-old manufacturing representative Steve Sammut and 51-year-old UX designer Erin Malone (who was actually an alternate juror, and did not deliberate on the verdict), said it came down to an analysis of performance reviews and a doubt in Pao’s own trustworthiness. “The environment definitely is biased against women in technology, and venture capital is even worse,” Malone told Reuters this week. Still, she clarified, “I didn’t find her as credible as she should have been.”
Even people who’d been following Pao’s career for years suggested that she was just the wrong person to represent a real issue. Earlier this week, Fortune writer Patricia Sellers wrote that in 2011, when she hosted a panel on the lack of diversity in Silicon Valley which included Pao, “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.”
“I’ve studied and written about women and power for 20 years,” Sellers wrote. “Ellen Pao was, quite simply, ill-equipped to take on this important issue.”
Sellers suggested that Pao’s husband, hedge fund manager Buddy Fletcher, influenced her decision to take this case to court. Fletcher, embroiled in his own discrimination and defamation lawsuits, ended up filing for bankruptcy in 2012 when an investigation into his finances revealed insolvencies.
In a pre-trial hearing, Kleiner was told that they could not bring up Fletcher’s money troubles as a motivation for Pao’s trial.
During the trial, Pao’s side kept money as a motivation out of the testimony and arguments entirely. Although Hermle often returned to the fact that Pao made $500,000 per year when she left the firm—more than her male junior partner peers—the sheer amounts of money that Kleiner Perkins partners are worth might have put Pao’s claims into perspective for the jury, but the subject was a subtle, if ignored, topic for Pao’s lawyers. John Doerr, who testified during the case, is said to be worth about $3.4 billion. Tom Perkins, one of the founding members of Kleiner Perkins Caufeild & Byers, is said tobe worth $8 billion. (Perkins, some may remember, wrote a letter to The Wall Street Journal in early 2014 comparing progressives’ “war on the rich” to Nazi Germany’s Kristallnacht. At the time, Kleiner Perkins quickly issued a tweet saying that “Tom Perkins has not been involved in KPCB in years. We were shocked by his views expressed today in the WSJ and do not agree.”)
Of course, Pao’s lawyer, Therese Lawless told Ars over the phone this week that the narrative that Pao was an imperfect plaintiff bought too much into Kleiner Perkins’ manufactured hype. “Ellen Pao was a phenomenal plaintiff… they [Kleiner Perkins] trashed her. That’s what they do.”
She commented to Ars briefly about a key pre-trial ruling that may have harmed Pao’s case. In the ruling, Pao’s lawyers were told that they could not demand the performance records of certain female Kleiner Perkins employees from the firm in a bid to prove that the company had a track record of marginalizing its female employees in a systematic way. Lawless said she never saw what those performance reviews contained, but she was disappointed by the ruling.
Lawless wouldn’t comment on whether Pao would appeal the ruling. Reuters has noted that appealing might not be in Pao’s best interest: “In 915 cases involving discrimination and retaliation over the past five years, California appellate courts have affirmed the lower court result 66 percent of the time, according to Westlaw data,” the news service reported.
Despite problems, Pao’s story resonated
Beyond the personal implications of the verdict, was Pao’s loss a set back for women? Re/code reported some Silicon Valley players saying that Pao’s high-profile lawsuit could discourage them from hiring more women, but that seems to be a minority opinion, and on a federal level, it’s illegal to discriminate based on gender during the hiring process if you are a company with 15 or more employees. A variety of state and local laws also apply.
Lawless, who has just filed another gender discrimination complaint against Facebook on behalf of client Chia Hong, disagreed that Pao’s loss would be bad for women. “I don’t know who’s saying that, I would just laugh… The amount of support that we’ve gotten around the world for Ellen Pao, whether it’s letters, gifts, or support, has been like nothing I’ve seen in my career. So, so many women relate to this.” In the last few weeks, a Twitter employee has also asked a judge for permission to create a class-action lawsuit against the social media company for adopting hiring practices that exclude women.
As the trial wound down, Former Yahoo President Sue Deckerand Aspect Ventures co-founder Jennifer Fonstad wrote guest blogs on Re/code declaring their support for Pao. On Tuesday, a group of 35 supporters paid about a thousand dollars to take out a “Thanks Ellen” ad in the Palo Alto Daily Post. The Wall Street Journal says the group is selling T-shirts with the same message.
Fran Maier, a co-founder of Match.com and the founder of TRUSTe, told Ars that in the aftermath of the Pao trial that she’s actually hopeful. “The illusion that it’s not an issue about gender parity in Silicon Valley—that’s over, men and women alike are speaking loudly and clearly.”
“It puts pressure on venture capital to improve its numbers, because six percent is just awful,” Maier added. Ars contacted a few venture capital firms that have no female partners, including Andreessen Horowitz, which had no comment, and Accel, which did not respond to a request for comment.
Can the NFL solve gender inequality in Silicon Valley?
Bonnie Crater, President and CEO of Full Circle CRM who’s also been a vice president and senior vice president at Genesys, Netscape, Network Computer, Salesforce, and Stratify, told Ars that she wasn’t surprised by the jury’s verdict.
She said that sexism in high-tech industries often reflects a “death by a thousand cuts” and that those cuts are hard to prove in a court of law. “In a lot of these venture firms that are run by men, there’s kind of a tribe that forms. It’s often hard for women to become part of that tribe and often times they [the men] don’t even know they’re doing it.”
Crater also said that although there was no legal victory in Pao’s case, the high-profile case is making it possible to have a high-profile discussion about gender inequity in the tech industry. And that can cause real change not just in how many women venture capitalists there are, but in what kind of tech gets funded and how that technology gets passed down to the consumers.
Venture capital is, Crater said, “Basically a bunch of guys that have started a bunch of these firms, and they don’t just invest [in startups] and leave, they go to board meetings, they take your calls,” and they help pick out executive staff for your company. According to Crater, male venture capitalists “invest in men because you feel more comfortable with them. They have to hang out with these people, it’s just natural that they feel more comfortable funding someone that’s similar to them,” Crater said.
“The guys that graduate from Stanford fund the younger guys that graduate from Stanford,” she added.
As for the future, Crater told Ars over the phone that she has “an idea that will actually work.” She described the NFL’s Rooney Rule, a 2003 mandate that, for every head coaching or senior football operations job, a team must interview at least two minority candidates. Crater said that her friend Patty Murray, a former senior vice president and director of human resources at Intel, had implemented a version of the rule called the “Murray Mandate,” requiring that a number of women candidates be given an interview as part of the hiring process for each position. For Intel, Crater said, that scheme has largely worked to improve their diversity numbers. Intel has not yet confirmed that detail to Ars. (Intel has had its share of controversy surrounding diversity. Last year, the company pulled an ad campaign from Gamasutra in response to some GamerGate supporters. It later reinstated the campaign, and at CES 2015, it pledged to devote $300 million to supporting women in technology.)
Crater said that because of Ellen Pao’s high-profile case, “I’m actually very hopeful.” As for her own success, “I got lucky or I had good managers, or something. There’s something I can’t put my finger on that allowed me to succeed.”
Maier said that for small companies starting up, taking some time to reach beyond your network when you’re hiring is valuable. “There’s a little bit of an echo of ‘grow fast and think about these things later'” in startup culture, Maier said. “You gotta do what you gotta do, and I’m not sure any company is going to think about diversity first, but if they become more enlightened, they’ll think about reaching out to a larger network, maybe understanding that a woman’s point of view could make a difference, or that a more diverse staff makes better decisions.”
She also said that changing culture is hard, but since Ellen Pao’s loss, talking about changing culture is easier.
“I think women have to be willing to put up with some of these practices, some of this stuff you’re just going to have to live with,” Maier said. “But maybe now you can talk about it.”