Ellen Pao asked for a $10 million payment from Kleiner Perkins as the cost of "not fixing problems"

Ellen Pao asked for a $US10 million separation payment from Kleiner Perkins Caufield & Byers, the venture capital firm she’s suing for gender discrimination, “so they saw it would be painful to not fix problems,” according to aRecode liveblog of her testimony today.

The news came up as Pao testified for the second day in her gender discrimination lawsuit against the firm, in a case that continues to air plenty of Silicon Valley’s dirty laundry. She is seeking $US16 million.

Here’s how it went, according to her testimony: Back in late 2011, KPCB partner John Doerr asked Pao and coworker Trae Vassallo to come up with ways to improve the firm’s treatment of women. They suggested a bunch of things, including more involvement by female partners in the interview process, tighter mentorships, and the like. Doerr, Pao says, was “noncommital.”

So Pao took it a step further on January 4, 2012, by writing a more formal memo to Doerr, partner Ted Schlein, Kleiner Perkins’ then-Chief Operating Officer Eric Keller, and the firm’s outside counsel, claiming that partner Ajit Nazre “bullied and deceived [her] into a brief relationship,” and that she had been purposely excluded from and alienated by many of the firm’s partners — and that while the situation with Nazre was awful, he was by no means the only bad apple.

“This is an uncomfortable and difficult situation, and I am at a loss as to how to address it going forward. I know that my career has been badly damaged by our firm’s failure to have properly addressed these matters in the past, and I fear it will be further damaged or destroyed by the current circumstances. I also believe strongly that two or three people leaving will not significantly change this element of our firm,” Pao’s memo read in part.

The memo also indicated a willingness to discuss matters further and work on improving the treatment of women at the firm. Instead, Pao says, she was just made into more of an outcast in the firm, getting the cold shoulder from her colleagues.

Keller’s response was to launch another investigation. It would be conducted by Steve Hirschfeld, the same outside lawyer who investigated Vassallo’s complaints against Nazre earlier.

After an interview with Hirschfeld, Pao didn’t believe it would change anything. She said as much in another email, again indicating that she wanted to work with the firm to improve matters. Keller asked for “a separation, my departure and a payment,” Pao says.

Which led to Pao asking for a $US10 million payment, which she believed was a big enough number to make the firm take notice that it would be costly not to fix problems.

Hirschfeld’s investigation concluded there was no systematic gender discrimination, and Pao stayed at her job for a little while longer, but eventually departed and filed this lawsuit in 2012.

Pao’s testimony is ongoing.

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