| SAN FRANCISCO
SAN FRANCISCO Aug 6 Venture capital firm
Kleiner Perkins Caufield & Byers has appealed a California
court's decision to allow a closely watched sex discrimination
lawsuit to proceed, trying to keep the high-profile case out of
a public courtroom.
The suit, which pits former partner Ellen Pao against one of
Silicon Valley's most storied venture firms, alleges harassment,
discrimination and retaliation. It became the talk of the Valley
last year with its references to an affair and its allegations -
denied by the firm - of sexual advances and sexist behavior.
The firm argues that Pao's suit, filed in May 2012, should
move to the private process of arbitration because Pao signed
operating agreements with mandatory arbitration clauses for the
funds she was involved in.
Pao's lawyer, Alan Exelrod, has argued that the clauses did
not apply because Pao was suing Kleiner itself - not its funds.
Pao never signed any arbitration agreements with the firm
itself, Exelrod said.
In June, a panel of justices at the California Court of
Appeal in San Franciso agreed.
"Pao's claims have their origin or genesis in the offer
letter, which does not contain an arbitration clause," they
wrote, referring to the firm's original offer of employment to
Pao. "Pao is not bound to arbitrate her complaint against KPCB."
In their petition for review, firm lawyers from Orrick,
Herrington & Sutcliffe argued that the court had embraced
"indefensibly narrow interpretations" of the law, and asked the
California Supreme Court to clarify various arbitration issues.
Pao, who left Kleiner last year and now works for the social
news site Reddit, did not immediately respond to a request for
"The issues Pao is litigating involve economics of the funds
she was involved with," the firm said in a statement issued
after a hearing on the matter in June. "All of those economic
issues are governed by the Managing LLC agreements which require
that disputes be resolved through arbitration."
The lawsuit has inspired debate especially in the Bay Area
on its specific merits as well as the broader issue of sexism in
the technology sector.
Until Pao's lawsuit, issues surrounding gender had largely
been brushed under the rug in the clubby world of venture
capital. Since the lawsuit was filed, female employees at
Pantheon and CMEA also filed lawsuits alleging discrimination,
but the firms have a lower profile than Kleiner.
Kleiner is known for backing companies such as Netscape,
Amazon.com Inc. and Google Inc.
The case in Supreme Court of the State of California is
Ellen Pao v Kleiner Perkins Caufield & Byers LLC and Does 1-20,
case no. S212557.