Ellen Pao’s Small Victory Pays Big Dividends

In a surprising decision, San Francisco Superior Court Judge Harold Kahn tentatively ruled that interim Reddit CEO Ellen Pao must pay her former employer, Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers, $275,966 to defray legal expenses from Pao’s failed sexual discrimination lawsuit.

Judge Harold Kahn “granted in part and denied in part” Kleiner Perkins’ demand that Pao repay $972,814 in costs for expert fees, depositions, transcriptions, and travel for expert witnesses that the firm had incurred during the trial.

Pao filed a reply to the ruling in San Francisco Superior Court. Arguing that she should not have to pay Kleiner’s “gargantuan and unreasonable charges.”. Judge Kahn agreed in part and disagreed in part with the appeal. He forced Pao pay only a fourth of the original figure demanded by Kleiner Perkins.

On March 27th, Pao lost a three year long gender discrimination suit against her former employer. It alleged that the venture capital firm denied Pao promotions and eventually fired her due to issues stemming from her gender.

In the suit, Pao asked for $16 million in compensatory damages, in addition to punitive damages. The jury could have awarded as much as $100 million if it had found Kleiner Perkins acted with malice.

In her lawsuit, Pao alleged that she experienced unwanted sexual advances, and was excluded from all-male ski trips and dinners. She also had to endure uncomfortable conversations about pornography. In addition, Pao alleged that she experienced retaliation from the company after she ended a relationship with coworker and Kleiner Perkins partner Ajit Nazre. Pao’s legal team brought in Tracy “Trae” Vassallo, a successful senior partner at Kleiner who testified about sexual harassment by Nazre.

Kleiner Perkins denied these accusations. He claimed Pao was a poor performer with a sense of entitlement, and a disruptive force in the workplace.

Pao’s team brought in Allison West of Employment Practices Specialists, who strongly criticized the defendant’s internal investigation of gender issues.

However, the majority of expert witnesses were called by the defense. David Lewin, a professor of human resource management at UCLA, testified regarding Pao’s job prospects after leaving Kleiner.

Mary Meeker – a senior partner at Kleiner with extensive Wall Street experience – was also brought in by the defense. She claimed that “Kleiner Perkins is the best place to be a woman in the [venture capital] business.”

Judge Kahn allowed most of the costs Kleiner Perkins had listed in its initial filing, including jury food ($177.56), filing and motion fees ($240) and technology equipment rental ($7,196). However, because Pao did not have sufficent assets to pay more than $800,000 in expert witness fees, the court would tentatively reduce the amount to $275,966.

Under the Fair Employment and Housing Act, the court must consider the economic resources of both sides and “scale” them to be fair. While noting that Pao “is not indigent,” Kahn also said that Kleiner has “vastly” greater economic resources.

Kleiner Perkins praised Judge Kahn’s ruling, claiming that its action was justified even though the amount may not have been.

Pao declined to comment.

Pao has already decided to appeal the decision in her case. However, she has said that she will drop the suit if Kleiner Perkins agrees to pay her $2.7 million. According to earlier filings in the case by Kleiner Perkins, Pao ran up her own legal expenses of $2.7 million. She offered to drop her appeal of the jury’s verdict if Kleiner Perkins compensated her for those costs. Kleiner Perkins had originally offered Pao nearly $1 million to settle before her case went to trial.

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