Kleiner bid for arbitration in sexism suit rebuffed

Reuters News
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Posted: Jul 09, 2012 7:51 PM
Kleiner bid for arbitration in sexism suit rebuffed

By Dan Levine and Mauro Whiteman

SAN FRANCISCO (Reuters) - A California judge on Monday tentatively rejected venture capital firm Kleiner Perkins Caufield & Byers LLC's bid to move a gender discrimination lawsuit brought by one of its own partners into arbitration.

The suit, brought by Ellen Pao in San Francisco state court, has become the talk of Silicon Valley, where the digerati are avidly debating its merits - along with broader questions about sexism in the technology industry.

If finalized, the decision from Judge Harold Kahn in San Francisco will keep the case in a public forum, as opposed to arbitration, which is generally viewed as more friendly to employers. A Kleiner representative declined to comment on the ruling.

Pao's lawsuit paints a picture of a firm where complaints against harassment went ignored, where a senior partner suggested that marrying the alleged harasser might be the solution to Pao's difficulties, and where women were labeled "buzz" kills.

In response, Kleiner characterized Pao as an underperforming partner who never told the firm she was unhappy with her treatment by male colleagues.

The venture capital firm sought to move the case to arbitration last month, saying the agreements governing various Kleiner funds mandated it. The firm argued that Pao was knowledgeable about her obligations.

"A deal's a deal," Kleiner attorney Lynne Hermle wrote in a court filing. "Especially when agreed to by a Harvard and Cravath, Swaine & Moore trained lawyer represented by outside counsel."

But Pao attorney Alan Exelrod wrote that Pao was suing the Kleiner firm itself - not its funds. Pao never signed any arbitration agreements with the firm, Exelrod argued.

Kahn agreed with Pao's attorney and denied Kleiner's request in a brief order on Monday.

"There is no arbitration agreement between plaintiff and defendant," Kahn wrote in his preliminary ruling.

Kleiner Perkins, founded in 1972, has backed firms including online retailer Amazon.com Inc, gaming company Electronic Arts Inc, biotechnology company Genentech, browser company Netscape, information-technology company Sun Microsystems and gaming company Zynga Inc.

A hearing on Kleiner's arbitration request is scheduled for Tuesday morning.

The case in Superior Court of the State of California, County of San Francisco is Ellen Pao v Kleiner Perkins Caufield & Byers LLC and Does 1-20, case no. 12-520719.

(Reporting by Dan Levine; editing by Tim Dobbyn and Andre Grenon)