By Victor Li
The gender discrimination class action that Sanford Wittels & Heisler is pursuing on behalf of five former female employees of KPMG is the latest in a string of sexual bias cases that the firm has brought against some of the biggest companies in the world.
On Thursday, a U.S. district court judge in Manhattan denied a motion by KPMG's lawyers at Ogletree, Deakins, Nash, Smoak & Stewart to dismiss the claims, or in the alternative, to force each of the five plaintiffs to pursue her claims individually.
In a 38-page decision, U.S district judge Jesse Furman ruled that KPMG's motion to dismiss was premature in light of the fact that no discovery has yet taken place in the case. The plaintiffs claim that despite receiving strong evaluations and consistent promotions early in their KPMG careers, they were later denied raises and promotions while being subjected to sexual harassment from coworkers and superiors. Four of the plaintiffs allege that they were treated differently after returning from paid maternity leave, while the fifth claims that she had her pay frozen because she missed many office events. All five were either terminated by or resigned from KPMG.
KPMG argued that the case should be tossed in part because of the U.S. Supreme Court's 2011 decision in Wal-Mart v. Dukes, which blew up a gender discrimination class action against the retailer due to lack of commonality of claims by the female Wal-Mart employees suing the company. KPMG's attorneys argued in their motion to dismiss that Dukes applied because KPMG, like Wal-Mart, lacked uniform, companywide employment practices, and because the alleged transgressions were made by individual managers and supervisors operating under their own discretion.
"Dukes signaled the 'death knell' for claims such as those made in plaintiffs' [complaint]," KPMG's attorneys wrote. The company also argued that because it no longer employed the plaintiffs, they lacked standing to seek an injunction barring KPMG from discriminating against them in the future.
Furman, however, disagreed with KPMG's arguments. He held that it was plausible that the plaintiffs might be able to demonstrate commonality at the class certification stage.
"Although the [complaint] includes generalized and conclusory allegations of 'flaws' and 'discretion' that would not suffice by themselves, plaintiffs allege that several specific headquarters-level policies resulted in discrimination," Furman wrote, citing KPMG's companywide flexible schedule policies, as well as the automatic demotion of women but not men who transfer from an international office to the U.S. Furman also held that because two of the plaintiffs were trying to get their jobs back, they had standing to seek injunctive relief.
The win was the latest in a string of impressive results for Sanford Wittels in gender discrimination claims. The firm won a stunning $254 million verdict against Novartis in May 2010, when the company was found liable for its pay, promotion and pregnancy policies. The firm also won class certification for a gender discrimination wage-and-hour suit against Publicis Groupe in July 2012, and filed similar sex-bias suits against Proskauer Rose in October 2011 and Bayer in May 2011.
Lead plaintiffs attorney Katherine Kimpel of Sanford Wittels told the Litigation Daily that she was pleased with the decision. "Dukes was very much a case driven by facts and evidence. In Dukes, there had been discovery and class certification. Here, we just have a complaint," said Kimpel. "[Furman] was clear that Dukes can't be applied willy-nilly to everything else."
Ogletree partner Cheryl Stanton, who represented KPMG, referred comments to her client.
Company spokesperson Manuel Goncalves told us in an email: "KPMG is recognized as a leader for its strong commitment to supporting women in the workplace. Diversity and inclusion have long been priorities for the firm, and they are woven into our culture and everything we do. We continue to believe this lawsuit is entirely without merit, and we intend to vigorously defend ourselves."
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