Sedgwick Gender Discrimination Class Action – Settlement Reached

Case Description

Case Type: Gender Discrimination
Company: Sedgwick, LLP

Sanford Heisler Sharp, LLP filed an Amended Complaint in arbitration in the gender discrimination class and collective action, Ribeiro v. Sedgwick, LLP (in arbitration as Sedgwick, LLP v. Ribeiro).

On her own behalf and on behalf of female Sedgwick attorneys, Traci M. Ribeiro, a high-performing, non-equity Partner at Sedgwick, alleges that Sedgwick engaged in systemic pay and promotion discrimination and thereby violated Title VII, the Equal Pay Act, and analogous state laws. Ms. Ribeiro seeks to represent a class of all female attorneys other than equity Partners and who are, have been or will be employed by Sedgwick in the United States.

The Amended Complaint adds allegations of discrimination and retaliation based on facts that occurred since the filing of the original complaint, including the promotion of two men, both of whom were objectively less qualified than Ribeiro, to equity Partner. Sedgwick denied Ms. Ribeiro promotion to equity Partner each year, from 2013 through the present.

The Amended Complaint also demands $200 million in lost wages and compensatory and punitive damages.

Procedural History of the Litigation

Ms. Ribeiro filed her claims in state court in San Francisco, but the case was removed to the Northern District of California (3:16-CV-04507). On August 23, 2016, Sedgwick moved to enforce an arbitration provision included in the Partnership agreement Ribeiro was required to sign as a condition of becoming a non-equity Partner.

Judge William Alsup found the agreement required the parties to arbitrate whether the case itself should be arbitrated. Judge Alsup expressed regret that Ms. Ribeiro’s case was relegated to arbitration, a forum with limited discovery and appellate review, but concluded that he was bound by federal precedent. Judge Alsup ordered the case to arbitration, leaving to the arbitrator the question of whether the case would remain there or proceed in federal court.

In December, JAMS Arbitrator Honorable Robert A. Baines (Ret.) heard and granted Sedgwick’s motion to compel arbitration of the claims. Judge Baines found that Ms. Ribeiro had “established both the requisite procedural unconscionability (based on the take-it-or-leave-it presentation of the Partnership Agreement in a setting of unequal bargaining power) and […] shown that several provisions in the arbitration agreement are substantively unconscionable[…]”

As a condition of compelling arbitration, Judge Baines ordered the removal of several of the terms contained in the mandatory arbitration provision. These unconscionable provisions included “the use of the JAMS Comprehensive Arbitration Rules (which includes a provision for cost-sharing of arbitration costs, as does the arbitration agreement itself), the ninety-day ‘statute of limitations’ for filing claims, and the requirement that the hearing commence within ninety days of the appointment of the arbitrator.” In essence, Judge Baines found these provisions so one-sided and unfair that they could not be enforced and struck them from the agreement. Judge Baines also ordered that the case will be administered under the JAMS Employment Arbitration Rules and Procedures.

The Amended Complaint

The Amended Complaint charges that Sedgwick’s male-dominated leadership and opaque compensation and promotion policies have produced stark disparities for female attorneys throughout the firm. The Amended Complaint refines the original class to include California and Illinois subclasses and adds a claim that Sedgwick’s systemic discrimination against the California Class unjustly enriched the firm in violation of the California Unfair Competition Law.

“Ms. Ribeiro is the perfect example of an outstanding employee who—because of her gender—has been denied fair compensation, equity status, and proper recognition,” said David Sanford, Chairman of Sanford Heisler, LLP, the firm that has taken over the matter as lead counsel.

Ms. Ribeiro has been a non-equity Partner at Sedgwick for 5 years and one of Sedgwick’s top performers since joining the firm in 2011. She has been passed over for promotion to equity Partner repeatedly in favor of less-qualified men, each of whom generated revenue that was a fraction of her own. Ms. Ribeiro also claims she has been paid substantially less as a percentage of her revenues than male partners and less than she would earn were she an equity Partner. Significantly, Ms. Ribeiro has faced retaliation for her efforts to obtain gender equity for herself and other women at the firm.

According to the Amended Complaint, Sedgwick not only promotes men at higher rates than women but also maintains a lower bar for male promotions, given that men are promoted with less experience and less business. At the same time, these men are given substantial leadership positions throughout the Firm. “Arbitration agreements, like Sedgwick’s, are too often used by companies to deter employees from seeking the justice they deserve,” said Xinying Valerian, Senior Litigation Counsel at Sanford Heisler, LLP. “The Arbitrator’s decision shows that despite her partner title, Ms. Ribeiro should be able to avail herself of the fairness protections in the arbitration process that all employees are entitled to.”

This case comes at a time when female attorneys continue to face strong headwinds. Despite the fact that almost 45% of big law associates are women, female attorneys account for only 18 percent of equity partner positions, according to a survey published in 2016 by the American Bar Association. Furthermore, a 2016 study of partner compensation from Major, Lindsey & Africa found that the average compensation for male law partners is about 44% higher than that of female partners: $949,000 vs. $659,000 – a differential largely due to male partners receiving more credit for rainmaking than do female partners under an old-boys’-club regime. Ms. Ribeiro’s Amended Complaint highlights some of these issues.

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