Kleiner Perkins awarded $276K in Pao case, partner John Doerr says firm is ‘doubling down on diversity’

On Thursday, Ellen Pao got the final word from a San Francisco Superior Court judge that she will have to pay $276,000 to cover a portion of Kleiner Perkins’ costs for the sex-discrimination trial that played out earlier this year, and her former boss at the firm describe her promotion there as “an error” in a TV interview.

Rough day.

Pao’s payout

After a short hearing Thursday morning, Judge Harold Kahn issued a final ruling consistent with his tentative ruling on Wednesday: Kleiner Perkins Caufield & Byers can collect $275,966 from Pao for reimbursement for their court costs and expert witness fees. But it could have been worse for Pao. The payout is roughly a fourth of the amount Kleiner Perkins had demanded — $972,814. Still, the venture capital firm called the ruling “a fair result.”

In March, a 12-member jury found in favor of Kleiner on each of Pao’s four claims of sex discrimination and retaliation during her seven years at the firm. She sued for $16 million, but walked away with nothing.

Kleiner demanded reimbursement for its nearly $1 million in fees — not including the cost of attorneys — during the five-week trial. Kleiner argued it had the right to collect that money because the firm offered Pao a settlement of nearly $1 million in 2014, about three months before the trial started, which she turned down.

Kahn said in his decision that Kleiner’s settlement offer to Pao was made in “good faith” and was not a “token,” as Pao had argued.

Pao opposed Kleiner’s request, saying she was not required by law to pay and called the sum the VC firm spent on expert witnesses –$864,680 — unreasonable.

Kahn rejected Pao’s argument. However, Kahn reduced the fees Pao has to pay to Kleiner to match the cost of her own expert witnesses. At the hearing, Kahn said while Pao — CEO of Reddit and a former venture capitalist still collecting interest from investments — was not the typical plaintiff in a discrimination case, she does not have the vast resources that Kleiner does.

“There is no doubt that KPCB has vastly greater economic resources than Ms. Pao,” Kahn wrote. “Nor is there any doubt that Ms. Pao is not indigent. While… Ms. Pao has significant economic resources, it is also undoubtedly true that the $864,680.25 that KPCB seeks in expert fees is a material amount in the context of Ms. Pao’s resources.”

Pao has filed a notice to appeal the jury’s decision; she has until mid-July to make her argument. If she does not appeal, Kleiner said she won’t have to pay the firm a dime.

John Doerr on Bloomberg

In the VC firm’s first interview since the discrimination case, Kleiner Perkins General Partners John Doerr and Beth Seidenberg spoke with Bloomberg West. The show aired Thursday evening.

When asked whether he made any mistakes with Pao, Doerr said: “I think it was an error to promote Ellen into an investing partner role. That didn’t work out for her. She was a really good chief of staff but not a good investor.”

Doerr hired Pao to serve as his chief of staff before promoting her to investor; he was also her mentor for much of her time at Kleiner.

When asked about his reaction to Pao’s suing the firm, Doerr said: “I was sick.  It was painful.  Ellen was a good chief of staff. But when I read the charges, I knew from that very moment that these had no merit.”

After learning of the lawsuit in 2012, Doerr had also quickly put up a blog post on the Kleiner website denying Pao’s charges. The firm has more women in high-level positions than most in the venture-capital business.

As for why Kleiner hasn’t simply paid Pao the $2.7 million she has asked for to not appeal and end the battle once and for all, Seidenberg said “We’ve tried. There’s no more we can do. We’re gonna keep trying.”

Doerr, who has two daughters, said he recognized the firm’s reputation had not gone unscathed: “Now we know there was a second trial going on in the court of public opinion. And on this topic of diversity it found against the technology industry and we, in the venture industry. We get that.”

But, the partners said, they learned a lesson. Doerr said the firm is “doubling down on diversity” and taking partners and portfolio companies through unconscious bias training. It also has plans to publish a diversity report “so you can judge us not by our rhetoric but by our results,” he said.

Seidenberg added that Kleiner is also trying to recruit from a more diverse pool through a fellows program that brings in top university students from around the country.

She said: “And our hope is that in 2016 we’ll get to 50% women and underrepresented minorities.”

Photo: Ellen Pao, right, leaves the courthouse with her attorney Therese Lawless in San Francisco Calif., on Tuesday, Feb. 24, 2015. By John Green/Bay Area News Group.

 

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  • sociopathic

    This is an absurd “win.”

    Legally, she is on the hook for the costs incurred by the defendant. She brought her case as a litigant, had her shot to prove it, and lost.

    Then, by the grace of the defendant, they said ‘drop it and we won’t pursue what it cost us to defend against your unwarranted lawsuit’ and she refused.

    Now this Judge is saying, that because the defendant has big pockets, the LEGALLY INCURRED costs because of this lawsuit needs to be reduced?

    How is this fair, how is this Justice?

    She knew the costs going on, and was banking on a payday. What next, any yokel can now sue, and when losing, use something like this as a hail mary pass to try and not pay anything to the defendant?

    Bad bad precedent.

 
 
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