Trials & Litigation

Kleiner Perkins to Make New Arbitration Bid in High-Profile Silicon Valley Sex-Discrimination Case

In a ruling that may be revisited, a California judge has nixed a Silicon Valley venture capital firm’s effort to arbitrate a high-profile sex-discrimination suit brought by a former BigLaw associate with sterling credentials.

Although Kleiner Perkins Caufield & Byers had said, in a motion filed last month, that the operating agreement for the entity for which junior partner Ellen Pao works has an express arbitration clause, San Francisco Superior Court Judge Harold Kahn disagreed. He found there was no arbitration agreement, but said his ruling was tentative, the Recorder reports.

However, the judge is allowing the firm to refile its motion to compel arbitration and include new arguments after another hearing Tuesday, according to the Business Insider and a statement provided to the ABA Journal by a spokeswoman for the venture capital firm.

It says Kleiner Perkins plans to file by July 13 a motion making third-party beneficiary and equitable estoppel arguments for arbitration. “KPCB continues to believe it has strong arguments and precedent to move the matter to arbitration,” the statement says. “Ms. Pao, like other partners, signed a variety of standard agreements requiring, among other things, that all disputes be resolved through arbitration.”

A supplemental hearing on the new arguments is expected July 20.

Pao’s lawyer, Alan Exelrod, has said she wants the case to proceed in the public litigation arena, notes a post in the Bits blog of the New York Times.

An earlier Mercury News article provides additional details about the firm’s claimed arbitration agreement with Pao.

The high-profile discrimination suit reportedly has attracted considerable attention in Silicon Valley, where Pao’s complaints of being sexually harassed and denied the same opportunities as male employees in a workplace dominated by men struck a chord with a number of women. She also says she suffered retaliation for complaining of discrimination.

However, Kleiner Perkins contends there was no discrimination and asserted that Pao was a subpar performer who had difficulty getting along with colleagues. Pao is a former associate attorney at Cravath Swaine & Moore who has an engineering degree from Princeton University and a law degree and master’s in business administration from Harvard University, according to her complaint.

“Although plaintiff now seeks to categorize the performance criticisms as improperly motivated, they were in fact accurate descriptions of consistent flaws in her performance, and made by a very wide circle,” wrote partner Lynne Hermle of Orrick Herrington & Sutcliffe, who represents the venture capital firm, in a recent filing responding to Pao’s complaint.

Earlier coverage: “Still in ‘Caveman Era’? Ex-BigLaw Associate with Star Credentials Sues Venture Capital Firm”

Updated at 4:48 p.m. to include information from Kleiner Perkins statement and at 5:43 p.m. to include information from Bits blog of New York Times.

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