KPMG Discrimination Class Action Case
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Case Type: Gender Discrimination
Company: KPMG
Kassman, et al., v. KPMG LLP

In June 2011, Class Representative Donna Kassman filed a lawsuit against KPMG to remedy KPMG’s systemic discrimination in pay and promotion, discrimination based on pregnancy, and chronic failure to properly investigate and resolve complaints of discrimination and harassment. Later that same year, the lawsuit was amended to add Named Plaintiffs from around the country who had experienced discrimination similar to what Ms. Kassman had suffered. The most recent version of the complaint is available here.

KPMG, the Big Four Accounting Firm that boasted a global revenue of more than $23 billion in 2013, has attempted unsuccessfully to derail the litigation numerous times. For example, on February 7, 2013, Judge Furman of the Southern District of New York handed KPMG a resounding defeat in its attempts to avoid litigation of class-wide claims. When KPMG attempted to characterize the experiences of the Plaintiffs as isolated and insufficient to support class litigation, the Court denied KPMG’s motion and allowed the class claims to move forward. Later, when Plaintiffs asked the Court to send Notice to the thousands of women who, according to Plaintiffs’ evidence, have been systematically underpaid for years, KPMG again vigorously opposed this motion. On July 8, 2014, Judge Schofield of the Southern District of New York handed KPMG yet another resounding defeat, ordering that approximately 9,000 women be given the opportunity to join the Equal Pay Act claims in the case.

Plaintiffs’ Equal Pay Act Claims

When asking the Court to order notice, Plaintiffs provided substantial evidence they believe demonstrates the systemic nature of pay disparities at KPMG. Plaintiffs provided not only documents and deposition testimony, but also expert statistical analysis as a part of their notice and reply.

That statistical analysis identified pay disparities attributable to gender that were “statistically significant” at 11.35 standard deviations (while courts only require the significance be at 1.96 or greater). When Plaintiffs’ expert compared the compensation of men and women at KPMG, he made sure that he was comparing apples to apples. To do that, he made sure he was only comparing the compensation of individuals doing (a) the same job in the same function; (b) in the same location; (c) with the same amount of tenure in the job; (d) and the same level of education; and (e) the same number of years of prior work experience. Based on this careful comparison, the expert identified that KPMG paid its female employees less than their male counterparts doing equivalent work in the same job title. According to the expert’s analysis, the probability that, despite this careful comparison, KPMG’s compensation could be gender neutral is less than 1 in one hundred million (0.00000001). To the extent that women are doing the work of men at higher job titles, the disparities only increased.

The Court ordered that notice be mailed to the affected women, and nearly 1,300 women (current and former employees) have joined to challenge KPMG’s unfair compensation.

If you have questions about the case against KPMG, you can get more information in the following ways:

donna_with_kids_(2)-75066-1Donna Kassman initiated the lawsuit against KPMG in 2011, but back when she joined KPMG in 1993 as a Tax Associate, suing KPMG was the furthest thing from her mind. “I always envisioned spending my entire career at KPMG; I bled KPMG blue for almost 18 years,” she explained.

Early in her time at KPMG, Donna moved quickly through the Firm’s ranks. By 1999, Donna became a Senior Manager and her skill and expertise made her a visible leader in the firm’s State and Local Tax (SALT) practice. In 1999, Donna was tapped by then Partner-in-Charge of SALT Robert Peters to become SALT’s Chief of Staff. In that role, she travelled around the country to KPMG’s various offices in order to develop, grow, and implement a national strategy for the practice.

The Chief of Staff position was not a permanent position and after three years, Donna rolled back into a client-facing role specializing in Employment Tax within the SALT practice. However, in this new role, she found herself interacting with different leadership. Unfortunately, these different leaders exposed and subjected Donna to gender discrimination that she had avoided up to that point.

For example, despite her consistently strong performance, KPMG, without explanation, slashed Donna’s salary by $20,000 while she was on maternity leave. When she asked one of KPMG’s Partners about the salary cut, he told her that she should consider the $20,000 she had previously earned “a loan.” When Donna attempted to address her concerns about her compensation again after some time had passed, the KPMG Partner shut down the conversation, commenting that Donna’s “nice engagement ring” showed she didn’t need to worry about money. Although KPMG recognized that Donna “in many ways…acted as more than a typical Senior Manager,” Donna was routinely paid less than her male colleagues. Despite her attempts to address pay inequities internally, KPMG did not take those concerns seriously and did nothing to look into the problem, let alone address it.

Throughout her time at KPMG, Donna was recognized as a “role model for other professional women.” In addition to managing her client duties, Donna also devoted time to implementing new mentorship initiatives and training programs, leading KPMG’s male leadership to consider making Donna a “Training Czar.” Like many working women and mothers at KPMG, although Donna worked on a flexible schedule, she nonetheless maintained the same responsibilities as her male colleagues. In December 2008, after serving as a Senior Manager for almost a decade, Donna was finally told that she would be put up for promotion to Tax Managing Director the next year, and in February 2009, Donna successfully completed the formal Leadership Evaluation & Assistance Program (“LEAP”). Despite multiple assurances from various male leaders at KPMG that Donna would be promoted, she never was.

Instead, Donna’s promotion, and career, was derailed after a male subordinate made gender-biased complaints about her “tone,” claiming Donna was “too direct” and “unapproachable.” When Donna sought help from KPMG’s Leadership, a Principal-in-Charge of the Ethics and Compliance Department told Donna “this is three men ganging up on a woman. We’ve had it before.” Another KPMG Partner admitted that the male subordinate had a “problem working with women.” Despite these acknowledgements, KPMG did nothing to help Donna, and she was ultimately driven from the Firm.

Like so many working women, Donna’s earnings were crucial to her family’s financial well-being. They were also vital to her identity.

“I was so proud of working at KPMG, and this career was something I had worked hard for, had sacrificed for. Having to confront KPMG’s repeated betrayals was devastating. Having that part of my identity stripped away was devastating. I don’t want anyone else to have to experience that, and I wanted to teach my children that you do the right thing, even when it’s tough. Bringing this lawsuit was the right thing to do.”

In fact, for Donna, she sees this as the logical extension of the work she did at KPMG:
“At KPMG, we helped companies work better and smarter, all while following the rules and regulations that governed their industry. KPMG isn’t following the rules and the way it is devaluing and mistreating its female employees isn’t smart. This lawsuit is about helping KPMG do better. It’s about helping KPMG become the Firm I always believed it was.”

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  • Click here to read the Fourth Amended Complaint.
  • Click here to read the Third Amended Complaint.
  • Click here to read Judge Furman’s Order Denying KPMG’s Motion to Dismiss.
  • Click here to read Plaintiffs’ Motion for Conditional Certification.
  • Click here to read Plaintiffs’ Reply in Support of their Motion for Conditional Certification.
David SanfordDavid Sanford
Chairman & Executive Board Member
Washington, DC
Katherine KimpelKatherine M. Kimpel
DC Managing Partner & Executive Board Member
Washington, DC
Kate MuetingKate Mueting
DC Partner
Washington, DC
Maya SequeiraMaya Sequeira
Associate
Washington, DC
Kevin HubbardKevin Hubbard
Associate
San Francisco, CA