Law360 has the latest on Karen Ward, the former head of real estate investment banking at EY, who asked a Manhattan federal court last July to invalidate the arbitration agreement she signed several years ago that has prevented her from suing EY over claims she was a victim of sexual harassment, gender discrimination, and retaliation, and has relegated her to behind-closed-doors arbitration proceedings.
A New York federal judge rejected a former Ernst & Young real estate bigwig’s attempt to nix an arbitration agreement based on a fee allocation order in the arbitration of her sex bias claims, finding her arguments about the agreement’s enforceability should be handled by arbitrators as well.
In his order Tuesday, U.S. District Judge John G. Koeltl granted EY’s bid to arbitrate Karen Ward’s request for a declaratory judgment that an arbitration agreement she signed was unenforceable in light of an arbitration panel’s preliminary order calling for an equal split of the costs and fees in the proceedings over her discrimination and retaliation claims under Title VII.
Judge Koeltl said that Ward’s so-called effective vindication doctrine arguments belonged in arbitration under U.S. Supreme Court precedent, because she challenged the entire arbitration agreement, rather than a particular delegation provision saying disputes over voiding the agreement should be decided in arbitration.
Because arbitration proceedings can get ridiculously expensive, Ward filed a motion in February 2019 asking a tribunal of three arbitrators to require EY to pay all arbitration costs. EY countered that the two parties should split the costs. In early March, the tribunal sided with EY, forcing Ward to pay half.
According to the complaint she filed last July, Ward “has been billed nearly $200,000 in arbitration costs, most recently receiving invoices on July 10, 2019 for the payment of an additional $137,250 in costs, for a grand total (to date) of approximately $185,000.”
Michael Willemin, one of the attorneys from Wigdor LLP who is representing Ward, told Law360 he is “disappointed with the decision, which did not ultimately address the substance of our position, which is that when companies like EY force victims of discrimination to pay nearly $200,000 merely to have their claims heard, society moves backward.”
EY told Law360 in a statement: “We remain confident that arbitration is a fair and equitable process to resolve this matter, and are pleased that the federal court has agreed.”
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