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Former venture capitalist acknowledges not investigating sex harassment claim

March 2, 2015, 11:11 PM UTC

A former venture capitalist at high-profile Silicon Valley investment firm testified Monday that he did not investigate allegations of sexual harassment by a female employee because he was worried about her privacy.

Ray Lane, a once prominent managing partner at Kleiner Perkins, took the witness stand today in a gender bias trial in San Francisco and said he was shocked when Trae Vassallo, his direct report, complained about sexual harassment by co-worker Ajit Nazare. But he indicated he did not look into the claims.

“Didn’t you know that the employer has a responsibility to launch an investigation?” an attorney asked Lane.

“Then I made a mistake,” Lane responded, explaining that an investigation would mean telling colleagues everything. “I cared more about her feelings than anything else. She’s married. She has children. It should be her choice.”

It was the fifth day gender-discrimination case filed by Ellen Pao, a former Kleiner Perkins venture capitalist, against her former employer. Pao claims she was pressured into a sexual relationship by senior partner Nazre and then was retaliated against after she complained.

Kleiner Perkins, meanwhile, has argued that Pao simply didn’t have the skills to be promoted. Its defense has highlighted performance reviews in which she received mixed marks for being “territorial” and pushed the idea that venture capital is a field where relatively few climb the ranks.

Pao’s attorney is trying to show that the firm had a pattern of turning a blind eye to sexual harassment. Bringing up Vassallo, a fellow junior colleague, is intended to bolster Pao’s own case that the office was a difficult environment for women.

Vassallo alleges that Nazre made sexual advances twice. The first time came at a dinner in 2009 when he touched her under the table with his legs. After the first dinner, Vassallo said she reported the incident to Lane after she learned Nazre would be leading her performance review.

“Ultimately people said they’d keep an eye on the review to make sure it was fair,” she said.

Later, in a second incident, Nazre invited Vassallo to a meeting he’d set up with a CEO in New York City. When Vassallo and Nazre arrived at the restaurant, the CEO never showed. After dinner, Nazre knocked on her hotel room door wearing a bathroom robe and slippers. Vassallo also reported this incident to Lane, but he joked about it rather taking it seriously, she said.

“I went to Ray and said it happened again,” she testified last week. “He said you should be flattered. He asked me what he should do. I said, ‘I don’t know.’ ”

However, Vassallo said she believed Lane would do something. When nothing happened, she sat down and wrote a letter to the managing partners who then launched an internal investigation. However, Lane said he had asked Vassallo if she wanted a formal investigation, which would have involved talking to all the management partners. He said she didn’t want an inquiry, contradicting her testimony that she merely “didn’t know.”

Lane, a former chairman at Hewlett-Packard and president at software giant Oracle, testified that he encouraged Vassallo to think about whether or not she wanted an investigation. “This is a very serious allegation and I feared for her safety,” he said.

He said he would have discussed the topic with her if she did not come back, but she returned with a letter documenting her complaint for management. Nazre was fired shortly after.

During the internal probe, Vassallo told the investigator Lane was from a different generation. “I knew he was trying to be funny when he said I should be flattered by Nazre’s attention,” she said in court.

Earlier on the stand, Lane mentioned that he did not know whether Vassallo had been promoted in 2011. He then said he had opposed her promotion.