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VC Firm Would Prefer to Sweep Details of Sex Harassment Suit Under the Arbitration Rug

Illustration for article titled VC Firm Would Prefer to Sweep Details of Sex Harassment Suit Under the Arbitration Rug

Ellen Pao, the woman who recently filed a sexual harassment suit against her former Silicon Valley employer Kleiner Perkins Caufield & Byers, is fighting right now to see that her case gets taken to trial, something that Kleiner Perkins would really rather not have happen. That's because, according to civil rights legal eagle Lisa Bloom, arbitration is a far easier, cheaper, and quieter process than going to court, and arbitrators tend to be more sympathetic to employers than juries.

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Business Insider explains that, during a Monday hearing, a San Francisco Superior Court judge denied Kleiner Perkins' request that Pao's case be moved to arbitration. On Tuesday Judge Harold Kahn further denied the motion without prejudice, which will allow Kleiner Perkins to refile the arbitration motion on other grounds. The venture capital firm has (so far unsuccessfully) been arguing that Pao tacitly agreed to an arbitration clause in documents she signed making her a partner at Kleiner Perkins.

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Most employers, explains Bloom, who says she's "litigated dozens of employment cases over the years," craftily sneak in such arbitration provisions in that mind-numbingly tall stack of initial paperwork that all new employees love so much. Once such provisions are signed, it becomes more difficult for an aggrieved former employee like Pao to have her triumphant day in court, complete with a righteous attorney who yells and gesticulates just like Al Pacino in And Justice For All. Arbitration, writes Bloom, almost always gives employers an edge in discrimination cases, making it that much harder for employees to exact a totally satisfying measure of justice:

Unfortunately for employees, once they sign those arbitration forms, they generally lose major legal rights, such as the right to a trial by jury and the right to their day in open court. Juries are more likely to be employees who sympathize with discrimination claims. Arbitrators are more likely to be professionals who sympathize with employers. And arbitration is generally a private affair, so embarrassing information that comes out during the case is easier kept quiet there.

So far, all signs point to "grab your popcorn and watch a good discrimination trial." Bloom, however, thinks we can all be fairly certain that Kleiner Perkins will do pretty much whatever it can to keep Pao's case from going to court, which makes this arbitration clause struggle crucial for the outcome of the suit.

Here's Why Ellen Pao And Kleiner Perkins Are Fighting So Hard Over Her Arbitration Clause [Business Insider]

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DISCUSSION

sealformerlyknownashappy
sealformerlyknownashappy

One thing to which she alludes in the original article, but is left out here: arbitration is also much, much cheaper then a jury trial, even factoring in the arbitrator's payment, and is also normally much, much faster. Our federal courts are so clogged with lawsuits right now that it takes literally *years* to reach any kind of conclusion, and then God forbid there's an appeal. So it's not necessairly all hide-the-bad-stuff skullduggery on the part of the employer - there are also some very valid, very practical concerns that would lead you to push for arbitration. It also has to be said that fighting arbitration isn't all about "justice" on the other side, either. Plaintiffs' attorneys know that trials are more resource and time intensive, and know that these factors drive up the settlement value of the case (which is how most civil cases that aren't tossed on a dispositive motion get resolved), so that you're more likely to get a higher settlement earlier out of an employer who has to go to court than an employer who is facing arbitration.