KPMG Strikes $10M Deal To End Decade-Long Sex Bias Suit

Posted March 30th, 2021.

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By Vin Gurrieri

Law360 (March 30, 2021, 3:51 PM EDT) — KPMG agreed to fork over $10 million to hundreds of women from its tax and advisory department to close the book on a long-running suit accusing the accounting giant of pay and sex discrimination, according to New York federal court filings Tuesday.

Nine named plaintiffs led by Donna Kassman filed a motion asking U.S. District Judge Lorna Schofield to approve the deal, which would resolve a hybrid class and collective action that started in 2011. The women claimed they were discriminated against and underpaid relative to their male peers.

As part of the deal, which was struck following a mediation session in December, women who opted into a certified collective under the Equal Pay Act agreed to drop their pay bias claims as well as any claims they have of sex or pregnancy bias under other laws. Although the collective was decertified in 2018, women who opted into the class could continue pursuing their EPA claims provided they served KPMG with a fact sheet.

The claims of about 450 women remain pending, including the nine named plaintiffs, according to Tuesday’s motion. The court filing noted that an average claimant will receive around $16,000 under the settlement, with the exact amount to be based on a set of criteria laid out in the agreement.

“Because this settlement was reached with the assistance of a highly respected mediator after nearly 10 years of adversarial litigation, this court may presume that it is fair and reasonable,” the women said in their motion. They added that the deal, if approved, “also allows the parties to avoid the significant litigation risks.”

KPMG separately filed court papers on Tuesday asking the judge to give the deal a thumbs-up, saying it qualifies as “fair and reasonable” and clears all the legal bars needed to win court approval.

“Nevertheless, this settlement does not constitute an admission by KPMG as to the merits of the allegations or claims in this case,” the company added in its motion. “KPMG continues to dispute the allegations by the claimants in this case and denies any and all purported legal violations or wrongdoing.”

Plaintiffs’ counsel Kate Mueting of Sanford Heisler Sharp LLP said in a statement to Law360 that “we are pleased to have reached a resolution that benefits so many current and former female employees in this longstanding fight against gender discrimination at KPMG.”

Representatives for KPMG were not immediately available for comment Tuesday.

Filed in June 2011, the class action initially included only Kassman as a named plaintiff. It asserted claims under the EPA, Title VII of the Civil Rights Act and various New York city and state laws.

An employee at KPMG’s New York office for 17 years, Kassman claimed she was unfairly passed over for a promotion to a managing director position, had her salary significantly pared after she had her first child and was ultimately forced to quit. Over time, more plaintiffs and claims were added to the suit.

Judge Schofield, however, denied the plaintiffs’ request to certify a Title VII class that could have exceeded 10,000 members, finding in a 2018 decision that there wasn’t enough evidence tying together the “countless individual employment decisions” the women were challenging. In that ruling, the judge also broke apart the conditionally certified collective.

The $10 million total settlement amount includes $3.5 million in attorney fees and costs to plaintiffs’ counsel.

The parties also noted in each of their court filings Tuesday that the agreement doesn’t include confidentiality or nondisparagement provisions and doesn’t preclude any claimants from being rehired by KPMG. The company noted that the “vast majority” of the claimants no longer work for the accounting firm.

The plaintiffs are represented by David Sanford, Kate Mueting, Jeremy Heisler, Thomas J. Henderson and Shaun Rosenthal of Sanford Heisler Sharp LLP, and Kelly M. Dermody, Rachel Geman, Anne B. Shaver, Michael Levin-Gesundheit, Tiseme G. Zegeye and Michelle Lamy of Lieff Cabraser Heimann & Bernstein LLP.

KPMG is represented by Colleen M. Kenney, Wendy Lazerson and John G. Levi of Sidley Austin LLP, and Peter O. Hughes, Diane M. Saunders and Chris R. Pace of Ogletree Deakins Nash Smoak & Stewart PC.

The case is Donna Kassman et al. v. KPMG LLP, case number 1:11-cv-03743, in the U.S. District Court for the Southern District of New York.

–Editing by Robert Rudinger.

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