FIVE MORE women have been added as named plaintiffs to the ongoing $350m (£243m) class action gender discrimination lawsuit against KPMG’s US arm.
On 13 May, Sanford Heisler, the law firm representing the five plaintiffs, filed an amended complaint against the Big Four firm, which has been involved in an ongoing gender discrimination lawsuit for the past five years.
The class action suit is now estimated to contain the names of more than 10,000 female KPMG employees, past and present, with more than 1,000 of those actively coming forward against the professional services company.
The five new named plaintiffs include Tina Butler, Cheryl Charity, Heather Inman, Nancy Jones and Carol Murray.
KPMG has said the “allegations that have been made are without merit”.
KPMG has been accused by the plaintiffs of developing a hostile work environment in which women are underpaid and rarely promoted to leadership roles.
The legal battle revolves around former KPMG manager Donna Kassman, who spent 17 years working in the firm’s New York office before resigning. In 2011 Kassman filed suit against the firm, claiming that she and other female employees suffered gender discrimination during their time at the company.
The lawsuit contains details of how KPMG slashed Kassmans’ base salary by $20,000 while she was on maternity leave because she was being paid “too much.”
When Kassman complained about the salary cut and wanted to discuss ways for her to earn back the $20,000, her male supervising partner allegedly asserted that she did not need the money because she “had a nice engagement ring”.
Lack of gender diversity
According to the lawsuit, approximately 50% of KPMG’s total workforce is female. Sanford Heisler, the plaintiffs’ lawyers, has accused the Big Four firm of being “part of an elite cadre of accountancy and professional services firms” that “actively perpetuates” gender discrimination.
It adds that women are “conspicuously absent from KPMG’s leadership,” stating that among the 20 members of KPMG’s global executive team, only one is female. In addition to this, of the 24 members of KPMG’s global board, only one is female.
“The company promotes fewer women to partner than the industry average. KPMG also promotes fewer women to senior manager positions than the industry average. KPMG’s promotion rate falls below its competitors, even though KPMG has a similar number of female non-management employees as the industry to groom and mentor for leadership,” the lawsuit alleges.
Soon after Kassman filed the lawsuit with Sanford Heisler, four other female KPMG employees, past and present joined the lawsuit.
In October 2014, some 9,000 current and former female KPMG employees in the US were contacted and given the opportunity to join in the high-value complaint against the firm.
Just two weeks after the women were contacted, Sanford Heisler confirmed that more than 200 additional women signed up to the legal challenge.
Katherine Kimpel, a managing partner at Sanford Heisler and lead counsel for the plaintiffs, told Accountancy Age at the time that the 200 women represented a “real interest in this case, and [shows there’s] likely a real problem”.
Problems are ‘nationwide and persist to this day’
The attorneys representing the five women claim that gender discrimination at KPMG is “truly systemic”, spanning nine KPMG offices, and at different job levels in a range of practice groups within the firm.
Maya Sequeira, the plaintiffs’ attorney at Sanford Heisler, said: “If the more than 1,100 women who responded to the notice allowing them to join the collective action regarding Equal Pay Act claims weren’t proof enough, the inclusion of five additional class representatives clearly illustrates that KPMG’s gender discrimination problems are nationwide and persist to this day.
“There is no merit to KPMG’s defence that experiences of discrimination at the firm are isolated or atypical, and this amendment takes the wind out of KPMG’s sails on that front.”
A KPMG spokesperson has hit out at the latest developments, telling Accountancy Age: “Two facts about the claims made by the plaintiff speak louder than any others: almost 90% of those eligible to have joined the collective action part of this lawsuit chose not to do so; and 86% of the small number that did join are not current KPMG employees. That is because the allegations that have been made are without merit. We do not believe that the addition of these five women changes anything in terms of our view of the lawsuit.
“KPMG has long been recognized as a great place to work and build a career, as well as a leader in fostering a diverse and inclusive culture. The firm is deeply committed to the career advancement of women and confronting the challenges women too often face in the workplace, and takes very seriously any concern about discrimination or unfair treatment. We could not be more proud of our culture and the fact that KPMG is replete with and led by many talented and successful women.”
This development comes just days after fellow PwC became entangled in a gender discrimination row in the UK, after one of its employees was refused access to her office for not wearing high-heeled shoes.
Paul Boyle is appointed as the president of the Chartered Institute of Internal Auditors
More than 5,000 restaurant companies are at risk of insolvency as Brexit raises costs
Three new partners have been appointed at top ten firm BDO
Paul Druckman has been appointed to the board of the Financial Reporting Council (FRC)