A judge has ruled that a woman may seek punitive damages from a venture capital firm in Silicon Valley on the grounds of sexual discrimination.
Ellen Pao, now boss of community site Reddit, claims she missed out on promotions during her time at Kleiner Perkins because of her gender.
She says she was dismissed after complaining.
The firm denies the charges and says its decisions were based on her performance.
Facebook and Twitter are also facing separate legal action over allegations of sexual discrimination from two former employees, which they deny.
The controversial court case between Ms Pao and Kleiner Perkins Caulfield and Byers, a high profile investor, has been in session for the last few weeks, with closing arguments due to be heard tomorrow (24 March).
In addition to punitive damages, Ms Pao is also seeking $16m (£11m) in compensation for lost wages.
The court had already heard that Ms Pao sent a memo to the management at Kleiner Perkins in January 2012 expressing concerns about the treatment of women at the firm after learning that three junior male partners in the firm were facing promotion while their female counterparts were not, and that events were taking place to which she claimed women were not invited.
‘Best in business’
However, investor Mary Meeker, a partner at Kleiner Perkins, said that the firm was not a bad employer.
“When I look at the venture capital business and look at the players in the industry, Kleiner Perkins is the best place to be a woman in the business,” she told the court.
“When you have people from all walks of life, all genders, all races, it helps people make better decisions because we have different perspectives.”
Ms Pao had embarked on an affair with a male partner of the firm who was later fired for unrelated sexual harassment, the court also heard.
Judge Harold Kahn ruled on Saturday that there was “sufficient evidence” in favour of Ms Pao’s complaint.
“There is sufficient evidence from which a reasonable juror could find, as to Ms Pao’s claims for gender discrimination and retaliation, that Kleiner Perkins acted with malice, fraud or oppression,” ruled Judge Kahn.
“There is sufficient evidence from which a reasonable juror could conclude that Kleiner Perkins engaged in intentional gender discrimination by failing to promote Ms Pao and terminating her employment, and that Kleiner Perkins attempted to hide its illegal conduct by offering knowingly false and pretexual explanations for its decisions not to promote Ms Pao and to terminate her employment,” he added.
Tina Huang, a former software engineer at Twitter, has filed a proposed class action legal action against the firm, alleging that promotions are based on “subjective judgement” by committees that are “predominantly male”.
She resigned last year after emailing Twitter’s chief executive about her concerns.
“Ms Huang resigned voluntarily from Twitter, after our leadership tried to persuade her to stay,” a Twitter spokesman told website Mashable .
“Twitter is deeply committed to a diverse and supportive workplace, and we believe the facts will show Ms Huang was treated fairly.”
Meanwhile programme manager Chia Hong has also filed a lawsuit against her former employer Facebook.
According to the complaint she has filed with San Mateo Court, she was ordered to organise parties and serve drinks to male colleagues, told off for requesting time off to visit her child’s school and asked why she did not just stay at home with her children.
“We work extremely hard on issues related to diversity, gender and equality, and we believe we’ve made progress,” said Facebook in a statement to website Re/code.
“In this case, we have substantive disagreements on the facts, and we believe the record shows the employee was treated fairly.”
Californian investor and entrepreneur Eric Ries told the BBC the wider issue of gender bias in Silicon Valley is well documented but can be unintentional.
“Our business operates on pattern recognition. They look at patterns of what has succeeded in the past and they try to identify those patterns in the future,” he said.
“So everyone wants to invest in the next Mark Zuckerberg… the problem comes when you’re doing pattern recognition you’re using unconscious selection… that’s, I think, where you see the sex [and other forms of] discrimination,” he added.
“Silicon Valley aspires to be a meritocracy so we have a culture that values outsiders and the perspectives they bring, and there is this idea that good ideas can come from anywhere… that’s our aspiration but the reality is in many ways we fall short,” he said.
Dr Sue Black, who has founded networks for women in computer science, said that she was pleased to see women taking legal action in the face of unfair treatment in the technology sector.
“Sure, [the cases] are very traumatic but it’s great that they are taking a stand,” she told the BBC.
“The numbers of women in technology are still about the same as they were 20 years ago,” she added.
“In some ways we have not managed to change anything but in other ways, especially with social media, it’s bringing lots of things out of the woodwork – more people are giving credibility to the fact that we need diversity in general in the workplace.
“We hear more and more women’s voices about what’s been happening to them – and we have more men agreeing it’s a problem.”
There is also more support, Dr Black said.
“I have felt in the last two or three years that there is a groundswell around this issue.
“Women are speaking out more publicly, more confidently, and there are more networks of people backing them up.”