Lessons for Employers from the Pao Trial

On March 27, 2015, a San Francisco jury returned a verdict in favor of venture capital firm Kleiner Perkins Caulfield & Byers in the highly publicized trial of sex discrimination and retaliation claims asserted by Ellen Pao. The Pao verdict does not make new law, but it does offer several valuable messages for employers:

  • Sex discrimination claims are likely to increase – Although Ms. Pao ultimately did not prevail at trial, she did convince at least four jurors to vote in her favor before the verdict was finalized, and her case served to highlight both the overt and the subtle discrimination that many female employees perceive in the workplace. In the wake of the trial, and the increased publicity and public discussion of sex discrimination in the workplace, many observers expect the volume of sex discrimination claims to increase, particularly in professional environments and in Silicon Valley.  Prudent employers will anticipate this trend and take appropriate precautions to minimize their risk of litigation, including meaningful training for their personnel and proper investigation of complaints, regardless of how established or powerful the target of the complaint may be. 
  • Documentation is very important – During trial, the defense team placed considerable emphasis upon the performance evaluations issued to Ms. Pao, and the jury appears to have done so as well.  The evaluations reflected certain criticisms of Ms. Pao’s performance and conduct and lent valuable credibility to the employer’s arguments at trial.  Many commentators believe that the jury may have found in favor of Ms. Pao had Kleiner Perkins not been able to produce credible documentation supporting its criticisms.  All too often, employers either fail to document deficiencies in performance or conduct at all, or create documentation which is incomplete or unconvincing. The Pao trial demonstrates the importance and value of proper documentation.
  • EEO policies do matter – while Kleiner Perkins ultimately prevailed, there were difficult moments during the trial during which the company was forced to admit that it could not find its written equal employment opportunity or non-discrimination policies. Just because most employers have long had written EEO policies, the policies should not be taken for granted. Employers should make sure they have current equal employment and non-discrimination policies and that those policies have been properly distributed. 
  • Beware of acts that may reflect subtle or unconscious bias – Attorneys in the Pao case devoted much attention to actions that arguably reflected subtle or unconscious bias against females, including dinners and firm functions to which only males were invited, as well as criticism for demonstrating certain traits (such as assertiveness and confidence) that were praised in male co-workers. Notably, many of the male witnesses at trial did not even recall events that Pao regarded as discriminatory, and that many professional women view as all too common in the workplace, demonstrating a “disconnect” that could make the recurrence of such events more likely than not. As overt and intentional discrimination hopefully becomes less prevalent in the workplace, the outcome of some lawsuits will increasingly be determined by evidence reflecting subtle and unconscious bias. In addition to addressing problems of overt discrimination in the workplace, employers should attempt to increase consciousness of subtle and unintended acts that may reflect (or be perceived as reflecting) bias. 

Because the jury returned a verdict in favor of the employer and the case did not involve novel questions of law, the Pao case may not represent a true landmark in discrimination law. The trial received intense publicity, however, and offers several valuable messages for employers who seek to eliminate bias in the workplace and avoid potential liability. Prudent employers will heed those messages and take steps to reduce their risk of claims.  


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