Posted November 27th, 2018.
By Michael Cohn
More than 1,100 women are seeking class-action certification in a gender discrimination lawsuit against KPMG, with allegations of sexual harassment and even assault at the Big Four firm.
The case has been underway since 2011, but has grown as more women have joined the lawsuit (see KPMG gender discrimination lawsuit expands and 1,000+ KPMG female employees join discrimination suit). On Tuesday, attorneys from Sanford Heisler Sharp LLP and Lieff Cabraser Heimann & Bernstein, LLP filed a motion in U.S. District Court for the Southern District of New York seeking class certification in the long-running lawsuit to challenge gender disparities in pay and promotion on behalf of female advisory and tax professionals at KPMG. Back in August, he court held a hearing on the motion, which wasn’t previously filed on the public docket, but the parties are still awaiting a decision. The case won conditional collection action status in 2014 under the Equal Pay Act and 1,112 former and current KPMG employees have now opted to join the case.
“We have a conditionally certified collective of 1,112 women, and in this recent filing we moved for final certification of that collective and we also moved for class certification of discrimination claims under Title VII, a more broad anti-discrimination law,” said Kate Mueting, a partner and co-chair of the Title VII practice in Sanford Heisler Sharp’s Washington, D.C., office and lead attorney for KPMG’s female plaintiffs. “There we allege that KPMG discriminates against women in pay and in promotions, and that this happens within a boys club culture that fails to address these disparities — even though KPMG has known about them — and that fails to address complaints of gender discrimination and sexual harassment. There are two components to the motion. One is final certification of the Equal Pay Act collective action, and the other is class certification of plaintiff’s Title VII claims. That could be a larger class than the 1,100-plus collective action.”
KPMG contends the claims are meritless. “We will not comment on pending litigation other than to note that plaintiffs’ claims are without merit, and KPMG will continue to vigorously defend itself,” said KPMG spokesman Manuel Goncalves. “As we have noted previously, KPMG is committed to the advancement of women throughout the organization, and is recognized as a leader for its strong record of supporting women in the workplace. Diversity and inclusion have long been priorities for the firm, and are woven into our culture and everything we do. We continue to believe that the allegations are not at all representative of the overwhelmingly vast majority of women’s experiences at KPMG. Instead, plaintiffs’ counsel refer to the complaints lodged while ignoring the robust investigations of those complaints and sanctions addressing any misbehavior.”
The latest motion filed in the case alleges rampant sexual harassment at the firm and even sexual assault. Some of the male employees at KPMG are accused of grabbing women’s buttocks, thighs and breasts and encouraging women to “put on lipstick” and wear high heels to secure engagements for the firm.
The complaint accuses KPMG of allowing sexual harassment to go unpunished and points to evidence from KPMG’s own centralized complaint database in which there were three reported complaints of criminal sexual assault and rape. Complaints of sexual harassment were often characterized as simply a “lack of professionalism” and little was done to punish employees.
“The motion for a class certification does detail widespread instances of sexual harassment, of KPMG failing to address complaints of sexual harassment and respond appropriately to these complaints,” said Mueting. “KPMG is really discouraging women from raising complaints of sexual discrimination and harassment.”
The complaint cites the example of a male KPMG advisory manager who had previously been reprimanded for “similar issues.” KPMG issued him a written warning instructing him to take a one-hour online course despite repeated misconduct, including finding that on multiple occasions at work the manager shared with his coworkers photos of young women he was “checking out,” explicit personal emails and videos of scantily clothed women dancing, and he had asked a female advisory employee to stand on a table in a skirt and heels.
“Despite the many gains women have made in the workplace, the record in this case shows that the deck continues to be stacked against them,” said Kelly Dermody, chair of the Employment Practice Group at Lieff Cabraser Heimann & Bernstein, LLP, and co-lead counsel for the plaintiffs, in a statement. “Change will only be possible through the collective resistance of the brave women who have come forward.”
Mueting expects the court will proceed on the latest motion filed in the case. “The motion is fully ripe and we understand that the court is in the process of considering it now,” she told Accounting Today.
Even though the complaint dates back to 2011, it may gain fresh impetus in the wake of the MeToo movement against sexual harassment over the past year. “Certainly the 2011 complaint predated the MeToo movement as well as the 1,100-plus women who joined the lawsuit,” said Mueting. “That also predated the MeToo movement. I was thinking about how courageous everybody who raised their hand during Me Too, but this happened long before that, where these women were courageous to raise their hand and call out KPMG’s discrimination long before MeToo.”
The firm has made moves in recent years to empower women under CEO and chair Lynne Doughtie. Since October, KPMG has named two female outside directors for its board, retired Air Force General Janet C. Wolfenbarger and Linda L. Addison, a former managing partner of the law firm Norton Rose Fulbright (see KPMG adds another independent director). But Mueting said her firm is continuing to receive complaints about unequal treatment.
“We have seen these disparities persist,” she said. “Since the filing of the lawsuit, KPMG has not made meaningful changes in addressing the gender disparities in compensation or the gender disparities in promotion.”