$350M Class Action Suit Against KPMG for Alleged Gender Discrimination

Michelle Remo, “Big 4″ observer
June 03, 2011 /

A former senior manager at KPMG has sued the Big Four accounting firm for engaging in gender discrimination against its female managers, including senior managers and managing directors.

Plaintiff Donna Kassman, from New York, claimed in a $350 million class action suit filed in the U.S. District Court for the Southern District of New York today that KPMG halted her promotion just because of unfounded claims by co-workers against her.

May 5 this year, the Financial Reporting Council has set about a consultation with UK firms following the recommendation of Lord Davies published on February 2011 ordering the FRC to “amend the UK Corporate Governance Code to require listed companies to establish a policy concerning boardroom diversity.”

Kassman has worked at KPMG’s New York office for seventeen years. In October 2010, she resigned from the company, blaming gender discrimination in addition to KPMG’s lack of interest to address the issue. Janette Wipper, Siham Nurhussein, and Deepika Bains of Sanford Wittels & Heisler, LLP represented Kassman in the class action suit.

According to Sanford Wittels & Heisler, KPMG denied Kassman’s promotion in the partnership track despite her long tenure in the accounting firm.

Through 2008 to 2009, Kassman was repeatedly told by her supervisors that she was next in line for a promotion to managing director.

However, after two male employees complained that she was “unapproachable” and “too direct,” KPMG allegedly removed her from the promotion list, subjected her to numerous hostile inquiries, and told her to meet with a “coach” to work on her supposed issues.

The criticisms were said to have derailed her career advancement.

Consequently, the two male employees were rewarded by KPMG with promotions instead of disciplining them for their harassment campaign, the class action suit lamented.

The class action suit added that female managers at KPMG are not only under-promoted, they are underpaid, too.

For example, KPMG cut Kassman’s base salary by $20,000 while she was on maternity leave because she was paid “too much.” KPMG could not show justification for cutting her pay according to the class action suit.

Kassman was only told by her male supervisor that she did not need the money because of her “nice engagement ring.” When she returned to work, the firm placed her on a Performance Improvement Plan.

Kassman claimed that after she gave birth to her first child, her career advancement in the accounting firm began to let up.

Kassman felt she had to move to a “flexible” schedule, under which she retained all the responsibilities of a full-time employee, but was paid less.”

“Ms. Kassman repeatedly complained up the chain of command about the gender discrimination and harassment she was experiencing, and the Company reacted with neither surprise nor concern,” said Siham Nurhussein.

“Her supervising Partner told her matter-of-factly that her male colleague might have a problem working with women, and the Office of Ethics and Compliance told Ms. Kassman that men had ganged up on women at KPMG before. KPMG not only tolerates gender discrimination, but displays an active interest in perpetuating it.”

Additionally, KPMG female employees with children also face gender discrimination for their status as “caregivers”.

Women density at KPMG appears to contrast the firm’s touted commitment to gender diversity as only half of its employees consist of female, with only one female representative for each of its 20-member global executive team and 24-member global board.

Also, KPMG partners comprise only 18 percent women, quite far from the industry average of 23 percent. KPMG promotes 35 percent of its women employees to senior managerial posts, fewer than the 44 percent industry average.

The class action suit, filed on behalf of thousands of current and former female employees, orders KPMG to pay punitive damages. It also looks to change KPMG’s discriminatory pay and promotion policies and practices.

 

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