Expert witness testimony in Pao v. Kleiner Perkins
In this historic case, Ellen Pao filed a gender discrimination suit against her former employer, venture capital firm Kleiner Perkins Caufield & Byers.
Pao sued Kleiner Perkins for $16 million in damages for gender discrimination, allegedly having being passed up for promotions, working in a pervasive sexist environment, and being fired in retaliation for complaining of gender bias and filing the suit. Pao’s expert witness estimated the plaintiff would have earned $14.5 million in compensation had she been promoted and continued to be employed by Kleiner Perkins for ten years.
A jury of half men and half women returned a complete defense verdict.
This article explores a number of expert witnesses that played pivotal roles in the case, both in analysis of the evidence, and in providing critique of each other’s reports and credentials.
For Pao to argue substantial economic damages, she needed to identify the gap between her ‘but for’ earnings (had she been promoted and not terminated) compared to her current earnings.
During Pao’s cross-examination, the plaintiff confirmed her cash salary at Redit, where she is interim CEO, as $250,000 plus stock options. Pao testified earlier that her base salary at Kleiner Perkins was $400,000 per year plus bonuses and investment profits.
During closing arguments, Pao’s attorney told the jury that if they were to find that Kleiner Perkins discriminated, but not award compensatory damages to Pao, that they “are undoing everything that you’ve done.” According to the plaintiff’s expert witness, Pao’s damages consisted of the difference after subtracting her earnings at Reddit from her salary and bonuses from Kleiner Perkins, had she been promoted to senior partner. This was estimated to be $2.69 million over two years or $7.14 million over five years. The plaintiff’s attorney said the jury needs to decide how much longer Pao would have worked there had she not been fired.
Kleiner Perkins retained Rhoma Young, an HR resources expert witness, who testified that the defendant had gone beyond the norm to ensure equality in the workplace by including Equal Employment Opportunity language in Pao’s hiring letter, and having well-documented performance evaluation policies. Kleiner Perkins appeared in poor light, however, when it could not find a copy of its gender discrimination policy, despite being referenced in offer letters.
Pao’s attorney Therese Lawless attempted to discredit Young during cross-examination by having her confirm that she had been served with a cease-and-desist order in relation to conducting workplace investigations.
Trae Vassallo, a female former Kleiner Perkins general partner, once compared the profits made by men and women employees, and found women outperformed the men. She reported this to Stephen Hirschfeld, of Hirschfeld Kraemer LLP, the outside investigator hired by Kleiner Perkins to assess gender discrimination.
Hirschfeld dismissed Vassallo’s comparison and relied instead on interview data from 17 employees at the firm to draw conclusions. His final report found no discrimination at Kleiner Perkins and no retaliation against Pao.
“He only looked at apples, he didn’t look at apples and oranges.” – Allison West
The plaintiff’s expert witness, Allison West of Employment Practices Specialists, argued that Hirschfeld’s investigation into gender bias at Kleiner Perkins was incomplete and inadequate in comparing criticism such as being territorial or having ‘sharp elbows’, that was said of Pao and other male colleagues. The male partners was promoted; Pao was not.
West argued that the language in Hirschfeld’s report showed a bias in favor of the employer, and challenged the expert’s credibility by commenting that she had not seen him participate in any industry associations and trainings. West stated the Vassallo analysis should have been a starting place for Hirschfeld’s analysis, and criticized it failing to even mention it in his report.
Kleiner Perkins’ defense attorney also questioned West’s credentials and criticized her for only looking for “bad notes in male partners’ performance reviews“. Furthermore, women make up 20 percent of investors at Kleiner Perkins; the industry average is 6 percent.
According to Jason Doiy of The Recorder, although Pao lost her case, employment attorneys expect more women to pursue gender discrimination claims. Two prominent Silicon Valley companies have been hit with gender discrimination suits since Pao’s trial began, and Facebook and Twitter are fighting claims of discrimination. Conversely, employment defense attorneys suggest that the ruling in this case will make potential plaintiffs more conservative in filing complaints. Others point out that this high profile case will encourage employers to ensure their anti-discrimination policies are up to date and to be careful to not take actions that appear retaliatory.
Relevant reading:
‘Kleiner Perkins case shows tech should adopt basic HR practices‘ by Ann Skeet of the San Francisco Chronicle
Kassman, et al., v. KPMG LLP, 2011 class action gender discrimination suit against Kleiner Perkins
‘Valuing executive compensation and executive stock options‘ by Dwight Steward, Ph.D., director of EmployStats
