Ellen Pao Sues Kleiner Perkins for Sexual Harassment

Ellen Pao, a partner at the leading Silicon Valley venture capital firm of Kleiner Perkins, has filed a sexual harassment and discrimination suit against her firm. The suit was filed May 10 in San Francisco and alleges wrongful conduct beginning 2006 and continuing over the ensuing six years.

Pao alleges that in 2006 a Kleiner Perkins investment partner Ajit Nazre, who left the firm last year, began sexually harassing her. When she complained to the firm’s senior partners and others, they retaliated against her by limiting her career advancement and income, Pao’s suit alleges.

Kleiner Perkins Caufield & Byers is one of Silicon Valley’s most distinguished venture capital firms on the strength of its early investments in high-flyers like Google and Amazon. The firm has played up the fact that nine of its 38 investment partners are women. But Pao’s suit alleges that women were routinely passed over for promotions and given a smaller share of the firm’s profits.

Pao’s complaint alleges that Nazre began making unwanted sexual advances toward her in 2006. When she rebuffed him, he “engaged in offensive, obstructionist and difficult behavior” toward her. Pao alleges she “succumbed to Mr. Nazre’s insistence on sexual relations on two or three occasions,” but informed him in October 2006 that she did not want a personal relationship with him.

Pao discussed Nazre’s behavior with Kleiner Perkins’s human resources staff and senior partners — including John Doerr, Ray Lane and Ted Schlein — but they did not follow up on her complaints, she contends. Instead the firm punished her for speaking out by removing her from the board of a start-up, asking her to transfer to the firm’s offices in China and giving her less of the firm’s profits, the suit alleges.

After Pao filed a formal complaint about Nazre with Schlein, Lane and Doerr, the partners promoted Nazre to be the head of the firm’s green technology unit, making him her direct boss, and moved him to an office directly across from hers.

Randy Komisar, another investment partner with the firm, also made unwanted sexual advances toward her, Pao contends. At least one other investment partner and three administrative assistants, all women, complained about Nazre’s behavior, Pao alleges. An independent investigation followed, leading to Nazre’s departure from the firm, the suit alleges.

On several occasions the firm’s partners held events for other partners and entrepreneurs that purposely excluded women, including one dinner organized by another partner, Chi-Hua Chien. A complaint about the exclusion of women prompoted Chien to explain that women were not invited because they would “kill the buzz,” Pao alleges.

None of the parties mentioned in Pao’s suit or Pao herself agreed to comment.

Pao is represented by Rudy, Exelrod, Zieff & Lowe in San Francisco.

Women account for just 6% of the CEOs of the top 100 tech firms while 22% of software engineers are women, according to the National Center for Women and Information Technology. The scarcity of women in prominent positions is even more pronounced in Silicon Valley venture capital firms. Among the other leading firms of Sequoia Capital, Greylock Partners, Benchmark Capital, Redpoint Ventures, Andreessen Horowitz and Accel Partners, Accel is the only firm to have a full time female investment partner.

“The firm regrets that the situation is being litigated publicly and had hoped the two parties could have reached resolution, particularly given Pao’s seven-year history with the firm,” said Kleiner Perkins spokeswoman Christina Lee. “Following a thorough independent investigation of the facts, the firm believes the lawsuit is without merit and intends to vigorously defend the matter.”

Before joining Kleiner in 2005 as a junior partner and Doerr’s chief of staff Pao worked at BEA Systems. She worked with Nazre in the green technology investment group, but after his promotion in December 2007, she asked to be switched to the digital investments group and was moved there two years later.

Pao’s investments with Kleiner Parkins have include Flipboard, a social news application for the iPad, and Jive Software, a business software maker that went public last December. Her suit says that she led Kleiner’s investment in a start-up called RPX, but that Kleiner gave its seat on the company’s board to another male partner rather than herself in retaliation for her harassment claims.

Ellen Pao graduated from Princeton University, Harvard Business School and Harvard Law School. She is married to Alphonse Fletcher Jr., a prominent African American Wall Street investor who has himself filed discrimination suits. In 1991 he sued Kidder, Peabody & Company alleging that it was underpaying him due to racial discrimination. He was awarded $1.3 million in that suit. Last year he filed a racial discrimination suit against the Dakota, a prestigious Manhattan apartment building, after its co-op board denied his request to buy an apartment next to his to accommodate Pao and their then-2-year-old daughter.