Kleiner Perkins has lost the first move in the gender discrimination lawsuit filed against it by one of its partners, Ellen Pao.But its lawyers got one last chance at avoiding a trial.
Judge Harold Kahn told Kleiner’s lead attorney, Lynne Hermle, “You and I just see this case differently.”
Kleiner had been trying to force the case into arbitration, under clauses in Kleiner’s fund documents.
But Judge Kahn said that the firm of Kleiner Perkins could potentially be found responsible for the damages Pao claims she incurred by being denied promotions and deals that could have won her a greater share of profits from Kleiner deals.
“There’s a lot of paper here,” said Kahn. “But it seems so simple. You have an employee, a junior partner, suing her employer for discrimination.”
Hermle argued that the carried interest Pao sought as damages could only be awarded by the Kleiner-linked entities that run specific venture-capital funds. But Kahn pointed out that Pao was seeking damages from Kleiner, not the funds.
Kahn did give Kleiner a bit of hope: It was allowed to refile the motion to compel arbitration on other grounds— which it hadn’t argued in the original motion.
There will be a new hearing on July 20.
Kleiner issued a statement after the ruling:
KPCB is encouraged by Judge Kahn’s willingness to hear our arguments on third party beneficiary and equitable estoppel claims. The firm will file its motions by July 13th to be heard in a supplementary hearing on July 20th. KPCB continues to believe it has strong arguments and precedent to move the matter to arbitration. Ms. Pao, like other partners, signed a variety of standard agreements requiring, among other things, that all disputes be resolved through arbitration. 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.
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