Former HP chairman admits 'mistake' in venture firm sexism trial

By Sarah McBride and Dan Levine

SAN FRANCISCO (Reuters) - Onetime highflying tech executive Ray Lane testified on Monday during a sex discrimination trial involving his former employer, Kleiner Perkins Caufield & Byers, that he made a mistake in judgment involving the harassment of a female venture capitalist at the firm.

Lane, who previously served as executive chairman of Hewlett-Packard Co (HPQ.N) and president of Oracle Corp (ORCL.N), told the court that he erred in not immediately informing others that Trae Vassallo told him about unwanted advances by her colleague, Ajit Nazre, during a 2011 business trip.

"I made a mistake," he said. "It was my mistake. I cared more about her feelings than anything else. I thought it should be her choice" whether to tell others at the firm and start an investigation, he said.

Whether Kleiner reacted appropriately to allegations of sexism is at the heart of the suit, filed by former partner Ellen Pao.

The case, brought in 2012, helped spark a broad and ongoing discussion about gender issues in Silicon Valley.

In the suit, Pao alleges she suffered discrimination and retaliation after Nazre pressured her into a 2006 affair which she soon ended.

Pao alleged in her lawsuit that Lane and other partners did not initially respond to her complaints. Eventually, Lane told her to consider marriage to Nazre, she said in her suit.

The discriminatory conduct spread to other partners, leading her to miss out on a key promotion, she alleges.

Vassallo, who testified in the case last week, said Lane had told her to be "flattered" by Nazre's advances, although she later said she believed he was joking. But Kleiner did eventually start an investigation into Nazre's actions after she told more partners.

The firm has vehemently denied Pao’s allegations. Kleiner’s lawyer, Lynne Hermle, said in court last week that the firm treated women fairly and did not promote Pao because she lacked talent.

But Pao’s attorney, Alan Exelrod, said the firm systematically failed to promote women to senior investing partner. He said Pao excelled at her work, lining up patent firm RPX, which raised $160 million in an initial public offering, as an investment.

Lane joined Kleiner Perkins in 2000, after leaving software giant Oracle. He championed Fisker Automotive, which raised $1.5 billion before declaring bankruptcy in 2013.

Lane is now a partner emeritus at the firm.

The case is Pao v. Kleiner Perkins Caufield & Byers LLC, CGC-12-520719, in California Superior Court, in the County of San Francisco.