Kleiner gets another shot to move discrimination case

Reuters News
Posted: Jul 10, 2012 2:18 PM
Kleiner gets another shot to move discrimination case

By Dan Levine

SAN FRANCISCO (Reuters) - A California judge on Tuesday said he would allow venture capital firm Kleiner Perkins Caufield & Byers LLC to make different legal arguments in its attempt to move an employment discrimination lawsuit brought by one of its own partners into arbitration.

San Francisco Superior Court Judge Harold Kahn had previously rejected Kleiner's bid to move Ellen Pao's lawsuit to arbitration, in a tentative ruling on Monday. [ID:nL2E8I9FGD] However, at a court hearing on Tuesday, Kahn granted a request from Kleiner to argue for arbitration on alternate grounds.

Arbitration is generally viewed as more friendly to employers. An attorney for Pao did not immediately comment after the hearing, while Kleiner said it is "encouraged" by Kahn's willingness to hear additional arguments.

"We expect arbitration to be a more efficient and speedier dispute resolution process than trying a matter before a jury years down the line in the San Francisco Superior Court," the firm said in a statement.

Pao's lawsuit 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.

The suit paints a picture of a firm where complaints of harassment were 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.

Meanwhile Kleiner characterized Pao, who joined the firm in 2005, as an underperforming partner who never told the firm she was unhappy with her treatment by male colleagues.

In court on Tuesday, Kleiner attorney Lynne Hermle argued that Pao should be bound by legal agreements that govern Kleiner's funds, and those contain arbitration agreements.

The judge appeared skeptical.

"Her employer is Kleiner Perkins, not the funds," Kahn said.

However, Kahn said he would permit Kleiner to file additional legal briefs, over the objection of Pao's attorney. Kleiner will argue that since the fund agreements are clearly designed to benefit the Kleiner firm, then the firm should also be covered by the arbitration clauses.

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.

Kahn set another hearing on the arbitration issue for July 20.

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 Bob Burgdorfer)