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Why Ellen Pao's Gender Discrimination Suit Matters

The case is providing a rare look into the real dynamics inside one of the country's biggest venture capital firms.

​Call it a real life AMA: interim Reddit CEO Ellen Pao is taking the stand again today in a San Francisco courtroom in the case against her former employer, which she is suing for gender discrimination. The landmark case is one of the first to bring long-swirling allegations of sexism in Silicon Valley front and center in the public domain.

"It's extremely notable that this case went to trial," said Elissa Shevinsky, the CEO of JeKuDo, a cybersecurity startup, and the author of an upcoming book about women in tech. "This is a pivotal moment. This is a moment where we are clearly seeing what sexism in the workplace looks like. It can be subtle and that's part of what makes it so insidious."

Over the years there have been endless rumors of a "frat club" culture in Silicon Valley that makes it difficult for women in the business to surge ahead and gain positions of power. There are data that show women are far outnumb​ered by men in top tier tech jobs and are l​ess likely to have their startups funded. While there are lots of factors that might lead to this, many people include a pervasive culture ​of sexism in the tech industry among them.

But each time a new case emerges, the reaction is swift and the excuses are plentiful. Venture capital firms and startups insist these are isolated incidents and that they don't have a culture problem. Without public records of what's actually happening in the boardroom, it's hard to say where the truth really lies.

Which is exactly what makes Pao's case so monumental. Whether or not she wins—and collects the $16 mi​llion she's seeking in damages—the case will provide a new stack of evidence on both sides of the fence, with under-oath testimony giving one of the first insider looks at the real dynamics in one of the country's biggest VC firms.

"Having this go through a public trial is important because not only do all of us get to bear witness, but it also becomes a cultural record. There is permanence and recognition attached to this because it is not transpiring in a murky fashion, behind closed doors, trapped between files and folders of negotiating lawyers," explained Saadia Muzaffar, the founder of TechGirls Canada, an organization that encourages girls to pursue careers in tech.

"But the fact that in 2015—after so much public outcry from women and people of color about harassment, discrimination, power and abuse—we still look to a court trial as the only yardstick to provide legitimacy to the lived experience of millions is downright shameful," she said.

Based on the evidence provided so far, it's not looking so good for those claiming there isn't a problem.

Pao, who worked at venture capital mammoth Kleiner Perkins Caufield & Byers from 2005-2012, launched the lawsuit while still employed as a junior partner at the firm. She was fired a few months later. Her lawyer claims the firing was retaliation for the suit, though KPCB denies this.

"Of the 92 firms, only 17 had even one senior female partner. Of those 17, just five firms had multiple senior female partners"

The trial began two weeks ago and has revealed a complex web of accusations and perspectives on the treatment of female employees at the firm, which is famous for backing early internet giants like AOL, Amazon, and Google.

Testimony has exposed questionable behavior on the part of male executives, according to Re/Code's Liz Gannes and Nellie Bowles, who have been coveri​ng the trial from day one. According to court testimony, the team excluded femal​e partners from ski trips and important dinners—including one with Al Gore. One partner gave Pao a book of erot​ic poetry. Former partner Tracy "Trae" Vassallo testi​fied a laundry list of inappropriate behavior by one senior partner, Ajit Nazre, including once showing up at her hotel room in nothing but a bat​hrobe.

The defense has lobbed back, arguing that the firm took allegations of sexual assault seriously enough to hire an outside investigator. The investigator confirmed the allegations and KPCB subsequently fired Nazre. It also argues the firm has s​upported and encouraged female executives, holding them to the same standards as its male partners. But this is all just the tip of the iceberg.

The crux of the battle really comes down to what Pao was hired to do and what sort of treatment she deserved. Pao's lawyer argues she had more than earned her keep and was entitled to a promotion and more responsibility within the company, but which she did not receive because she was a woman. KPCB's attorney argues she wa​s only ever hired as a consultant and didn't get promoted because she hadn't earned it, not because of her gender.

The fact that KPCB and Pao were either unwilling or unable to settle outside of the courtroom is indicative of just how subjective the case is—at least one side is unwilling to budge and feels there is enough evidence to support their claims. And because they did not settle outside of the courtroom, all of the evidence on both sides will be laid out in the public record, finally giving a glimpse inside the boy's club culture that purportedly runs rampant in Silicon Valley.

There have been previous lawsuits, such as when Tinder co-founder Whitney Wolfe sued her former colleagues for sexual harassment and discrimination. Wolfe claimed she was called a "whore" on multiple occasions and demoted because having a female leader "makes the company seem like a joke," according to The Wa​shington Post. But Tinder suspended the offending exe​cutive (who later resigned) and settl​ed with Wolfe for an undisclosed amount out of court, so the meat of the company's treatment of women was never publicly disclosed.

Zillow, a real estate startup, was also slapped with a sexual harassmen​t suit in December by former sales consultant Rachel Kremner, who claimed the company had an "adult frat house culture." But it's still early days in the process and Zillow has f​iled a request for the whole case to be thrown out, so we haven't gained much insight there either.

Uber, while juggling plenty of accusati​ons of sexual harassment by their drivers, has gotten into hot water for decisions like advertising "hot chick" ​drivers (and suggesting they dig up​ dirt on a female journalist who criticized the campaign).

There are hard numbers that show how underrepresented women are in the industry, too. Last year, Fortune report​ed that only 4.2 percent of venture capital investors at the country's top firms are women.

"Of the 92 firms, only 17 had even one senior female partner. Of those 17, just five firms had multiple senior female partners. Of those five, only one firm (Scale Venture Partners) had at least three senior female partners," Fortune found. 

Having a public record of the problems at KPCB will bolster discussions about ensuring equal treatment as the tech industry continues to boom. But, as Muzaffar pointed out, it's a bittersweet addition to the conversation.

"Yes, we need this," she told me. "But what a pity that we need it as badly as we do, given we are fully one half of humankind."