Trial Begins in Silicon Valley Gender Discrimination Suit

A closely watched gender discrimination trial over a lawsuit against a top Menlo Park venture capital firm began in San Francisco Superior Court Tuesday morning.

Opening arguments portrayed Ellen Pao as a victim of retaliation while a partner at Kleiner, Perkins, Caufield & Byers, when she broke off an affair with a married colleague. But the firm's attorneys said Pao didn't have the skills necessary for the job.

In his opening trial statement, attorney Alan Exelrod described a male-dominated culture at Kleiner, Perkins, Caufield & Byers.

Exelrod said his client, 45-year-old Ellen Pao, had received erotic poetry and sketches of nude women from a senior partner at the firm, and another male employee had interfered with her work when Pao broke off an affair with him.

"Kleiner Perkins used Ellen Pao's many talents for six years, but when it came time to pick who would be the next generation of investing leaders at Kleiner Perkins, Kleiner only picked men," the attorney told jurors.

The firm has denied wrongdoing and says Pao was a poor performer who didn't get along with her colleagues.

"Ellen Pao did not succeed at Kleiner Perkins as an investing professional because she did not have the necessary skills for that job," said KPCB's attorney, Lynne Hermle. "She did not come close."

In addition, Hermle said in her opening statement that the company has been a leader in recruiting and supporting women in technology.

Pao is seeking $16 million in damages. The firm is seeking to limit any possible damages by arguing that Pao is well compensated in her current position as interim CEO of the popular social media company Reddit and hasn't suffered financially since leaving Kleiner after filing her lawsuit.

Venture Capital's Reputation

Venture capital firms provide much of the startup funds for tech companies and have a reputation of being even more insular and male-dominated than the companies they help launch. Kleiner Perkins helped build companies like Amazon, Netscape, Genentech and Google.

"In general, it's a culture that has not been welcome to women," said Deborah Rhode, a Stanford law professor who teaches gender equity law.

A study released last year by Babson College in Massachusetts found that women filled just 6 percent of the partner-level positions at 139 venture capital firms in 2013, down from 10 percent in 1999. Kleiner Perkins does have more female partners than many of its competitors, almost 20 percent.

Even if Pao loses, Rhode thinks that the case puts venture capital firms "on notice that they're going to be held accountable."

It's rare for a Silicon Valley discrimination case to make it to trial, though, giving the public a glimpse into venture capital culture.

"We'll get to make our own decisions about whether a man would have been treated in the same way she was treated in some of these contexts," Rhode said.

Kleiner fired Pao in 2012 — six months after she filed her lawsuit. She had been hired in 2005 to serve as chief of staff for senior partner John Doerr, who helped direct early investments in Google and Amazon.

Pao left the administrative position with Doerr in 2010 to become a junior partner with full-time investment duties.

Exelrod said she was excluded from a dinner at the home of former Vice President Al Gore -- a partner at the firm -- after another Kleiner partner told her "women killed the buzz," and also was subjected to a conversation about pornography that a senior Kleiner partner did not stop, the lawyer said.

Hermle, however, said Pao "repeatedly and consistently seeks to twist facts, circumstances and events."

The trial, in front of a jury of five men and seven women, could last four weeks.

Pao Changes Reddit Culture

Pao became interim CEO of Reddit in November. The company announced a new privacy policy on Tuesday under which it will remove photos, videos and links with explicit content if the person in the image hasn't given permission for it to be posted.

It's a big shift from the online venue's hands-off approach to privacy, under which its 160 million users have largely policed their own forums within certain guidelines, such as no child pornography or spam.

The change came about six months after hackers obtained nude photos of Jennifer Lawrence and other celebrities and posted them to social media sites, including Reddit.

Read the lawsuit

Sudhin Thanawala and Michael Liedtke of the Associated Press contributed to this report.