KPMG Gender Pay, Promotion and Pregnancy Discrimination Class Action

Case Description

Case Type: Gender Discrimination
Company: KPMG
Kassman, et al., v. KPMG LLP

In June 2011, Class Representative Donna Kassman filed a lawsuit against KPMG to remedy KPMG’s systemic discrimination in pay and promotion, discrimination based on pregnancy, and chronic failure to properly investigate and resolve complaints of discrimination and harassment. Later that same year, the lawsuit was amended to add Named Plaintiffs from around the country who had experienced discrimination similar to what Ms. Kassman had suffered. The most recent version of the complaint is available here.

KPMG, the Big Four Accounting Firm that boasted a global revenue of more than $23 billion in 2013, has attempted unsuccessfully to derail the litigation numerous times. For example, on February 7, 2013, Judge Furman of the Southern District of New York handed KPMG a resounding defeat in its attempts to avoid litigation of class-wide claims. When KPMG attempted to characterize the experiences of the Plaintiffs as isolated and insufficient to support class litigation, the Court denied KPMG’s motion and allowed the class claims to move forward. Later, when Plaintiffs asked the Court to send Notice to the thousands of women who, according to Plaintiffs’ evidence, have been systematically underpaid for years, KPMG again vigorously opposed this motion. On July 8, 2014, Judge Schofield of the Southern District of New York handed KPMG yet another resounding defeat, ordering that approximately 9,000 women be given the opportunity to join the Equal Pay Act claims in the case.

Plaintiffs’ Equal Pay Act Claims

When asking the Court to order notice, Plaintiffs provided substantial evidence they believe demonstrates the systemic nature of pay disparities at KPMG. Plaintiffs provided not only documents and deposition testimony, but also expert statistical analysis as a part of their notice and reply.

That statistical analysis identified pay disparities attributable to gender that were “statistically significant” at 11.35 standard deviations (while courts only require the significance be at 1.96 or greater). When Plaintiffs’ expert compared the compensation of men and women at KPMG, he made sure that he was comparing apples to apples. To do that, he made sure he was only comparing the compensation of individuals doing (a) the same job in the same function; (b) in the same location; (c) with the same amount of tenure in the job; (d) and the same level of education; and (e) the same number of years of prior work experience. Based on this careful comparison, the expert identified that KPMG paid its female employees less than their male counterparts doing equivalent work in the same job title. According to the expert’s analysis, the probability that, despite this careful comparison, KPMG’s compensation could be gender neutral is less than 1 in one hundred million (0.00000001). To the extent that women are doing the work of men at higher job titles, the disparities only increased.

The Court ordered that notice be mailed to the affected women, and nearly 1,300 women (current and former employees) have joined to challenge KPMG’s unfair compensation.

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