September 26, 2021

KPMG Agrees to $10 Million Deal with Female KPMGers In Lengthy Gender Discrimination Case

It took 10 years but an age bias lawsuit first filed against KPMG in 2011 by former senior manager Donna Kassman that now includes eight other plaintiffs and hundreds of other KPMG ladies, a vast majority of whom no longer work for the firm, is finally reaching the end of the road.

Law360 reported yesterday:

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.

According to Law360, KPMG filed separate court papers on Tuesday saying it backs the proposed settlement but added the usual Big 4 legal boilerplate response that the firm “continues to dispute the allegations by the claimants in this case and denies any and all purported legal violations or wrongdoing.”

Kassman, who worked for KPMG for 17 years before resigning in October 2010, filed a $350 million lawsuit against KPMG in June 2011 alleging “relentless gender discrimination and harassment.” Several other women eventually joined Kassman’s class-action lawsuit as named plaintiffs.

The plaintiffs had sought to certify a proposed class of more than 10,000 current and former female associates, senior associates, managers, senior managers/directors, and managing directors within KPMG’s tax and advisory functions dating back to Oct. 30, 2009, who claimed that the firm’s pay and promotion practices violated the disparate impact provision of Title VII of the Civil Rights Act of 1964.

The lawsuit also sought to certify a class of the same group of employees who worked for KPMG in the state of New York dating back to June 2, 2008, who claimed that the firm’s pay and promotion practices also violated New York law.

The plaintiffs alleged that, although women are hired as associates at nearly the same rate as men, females represent only about one-fourth of the managing directors and less than one-fifth of the partners at KPMG.

They also claimed that women’s total compensation is 2.7% less than men’s in KPMG’s tax practice on average and 2.8% less in the firm’s advisory practice. The plaintiffs contend that KPMG knew as far back as 2009 that compensation disparities exist for women and the firm has done nothing to address it.

The female KPMG workers filed a motion on Nov. 27, 2018, that asked a Manhattan federal court to certify their class and collective action under Title VII and the Equal Pay Act.

However on Nov. 30, 2018, Judge Schofield decided against certifying the Title VII class that would have exceeded 10,000 members, citing the landmark 2011 U.S. Supreme Court decision in Wal-Mart Stores, Inc. v. Dukes in her ruling.

We reported at that time:

Betty Dukes, a greeter with the big-box retailer, led a class-action lawsuit on behalf of as many as 1.5 million female workers accusing Walmart of systemic gender discrimination against women. They alleged that the discretion exercised by their local Walmart supervisors over pay and promotion matters violated Title VII by discriminating against women.

But the Supreme Court dismissed the lawsuit on the grounds that the plaintiffs “did not suffer from a common policy of discrimination.” In the majority opinion, written by Justice Antonin Scalia, the court ruled that because the plaintiffs provided “no convincing proof of a companywide discriminatory pay and promotion policy, we have concluded that they have not established the existence of any common question” necessary for a class-action suit. …

Schofield said Dukes “makes it extremely difficult for a gender discrimination suit to proceed as a class action when the discriminatory treatment was the product of local supervisors exercising their discretion in awarding pay and promotions,” not KPMG operating under a general policy of discrimination.

She stated that most of the conduct challenged in Dukes “provided a roadmap to avoid class certification” of a nationwide class alleging gender discrimination. And, not surprisingly, during the years since Dukes, “KPMG has utilized a decentralized system for determining pay and promotion reminiscent of that used by Walmart in Dukes.”

The judge also denied final certification of the Equal Pay Act collective, saying in her November 2018 ruling that “the sheer size and breadth of the proposed collective” suggests that its members didn’t work in a single “establishment” and aren’t “similarly situated.”

KPMG Strikes $10M Deal To End Decadelong Sex Bias Suit [Law360]

Related articles:

KPMG Sued for $350 Million in Gender Discrimination Lawsuit
Some Current and Former Ladies of KPMG Can Expect Extra Special Mail Very Soon
Nearly 900 Female KPMG Employees Have Joined the Gender Discrimination Lawsuit
Plaintiff Who Filed Gender Discrimination Suit Responds to KPMG’s Women’s Leadership Campaign
Female KPMG Employees Seek Class Status in Gender Discrimination Lawsuit, Detail Alleged Sexual Misconduct at the Firm
Federal Judge Sides with KPMG in Gender Discrimination Lawsuit

Latest Accounting Jobs--Apply Now:

Have something to add to this story? Give us a shout by email, Twitter, or text/call the tipline at 202-505-8885. As always, all tips are anonymous.

7 Comments

  1. I have followed this story for some time. If the firm “continues to dispute the allegations by the claimants in this case and denies any and all purported legal violations or wrongdoing,” why the payout? And where was KNOW during all of this? I thought the purpose of that committee was to support women during their careers and all of that shite, you know, sisterly love!! I guess they don’t really care after all…tsk, tsk….

    1. Because sometimes the legal fees exceed the settlement costs. Maybe KPMG should start paying hourly wages going forward.

  2. KPMG partner (then an employee) harassed 2 interns and was banned from campus, but multiple partners covered up the harassment because the employee helped win a large engagement. That engagement put a lot on money in the pockets of the coverup partners and led to subsequent promotions to leadership (as well as the employee being promoted to partner). The harassing partner was ultimately fired when he lied about a sexual relationship with a subordinate, but even that relationship had been concealed from the firm by one of the coverup partners when he moved the guy out of state solely to avoid a deposition in the subordinate’s divorce trial (and the resulting required notice that would be given to OGC). Nothing was ever done to the coverup partners, with one telling me directly that he was untouchable. KPMG is beyond rotten.

  3. Let’s also not forgot KPMG in the UK fired two partners for bullying. Deloitte is just as bad, growth at all cost have they ever noticed their female leaders are 90% external hires. If you take a look at the executive committees in Canada they are all white males. Yet they speak up on their diversity and inclusion….pfffttt. Look at glassdoor lack of support and equal opportunity to perform and get promoted still an issue.

      1. LOL u troll you’re probably a white male. Data does not lie. All those women joining the class action lawsuit at KPMG does not lie there is a problem. It’s an embarassment that most female partners in Deloitte Financial Advisory Canada are external hires for example. Do a quick scan on Linkedin. Add to that Deloitte Canada’s CEO is a from Australia.

        Read the article below and educate yourself on how difficult it is for women. It’s time for the Big 4 to take action and not rhetoric.

        https://hbr.org/2017/10/a-study-used-sensors-to-show-that-men-and-women-are-treated-differently-at-work

  4. So the cost to KPMG for rampant sexism and discrimination is probably less than they spend on Omaha Steaks for everyone in years that they do that. Well, until they get the bill from their external legal counsel, at hourly rates. That’ll sting.

Comments are closed.

Related articles

Compensation Watch ’21: Deloitte Puts Mid-Year Raises On the Table

If you follow TheBig4Accountant on Instagram, you might have seen this included with TB4A’s Instagram Stories yesterday: That is what Deloitte & Touche Chair and CEO Lara Abrash told Deloitters in audit and assurance during an all-hands call on Thursday morning. This was also confirmed in posts on Fishbowl and Reddit. It was also noted […]