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October 8, 2014

Equal pay suit against KPMG US intensifies as 9,000 women offered an opt-in

The Southern District Court of New York has approved for a court notice to be sent to 9,000 KPMG US female employees giving them an opportunity to opt-in a collective action challenging pay discrimination at KPMG.

The notice was sent to former and current female employees who worked in a client service delivery role as associates, managers, senior managers, directors or managing directors in KPMG’s advisory or tax functions from 17 October 2008 to present days.

The case was first brought to the court in 2011 when a senior manager of KPMG US Donna Kassman filed a $350m class-action against the firm alleging gender discrimination denied women opportunities to move into leadership positions.

The initial plaintiff worked at KPMG’s New York office for 17 years. She resigned, claiming she was denied a promotion and had received a salary cut before going on maternity leave.

Sanford Heisler senior litigation counsel Kate Mueting told International Accounting Bulletin that since 2011 KPMG has offered a lot opposition to the allegations and she welcomed the court’s decision which offer more women the chance to join in the legal claim.
When the ruling in favor of the plaintiffs was made Judge Schofield said: "Plaintiffs’ preliminary expert analysis shows that nationwide pay disparities at KPMG attributable to gender are statistically significant at more than eleven standard deviations, meaning that the probability that KPMG’s compensation could be gender neutral is less than one in one hundred million."

Mueting said that the amount for compensation sought in the suit will only be determinate once the firm has reviewed the documents and individual cases of the women deciding to join the suit.
She said that the number of women that are likely to join the suit is hard to predict, but that in a similar case the firm has had 1,000 people opt-in out of approached 9,000.

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After 31 January Mueting expects further legal proceedings which could lead to delays in reaching a final judgement unless a settlement is reached.

KPMG said it was unable to comment on the case and reaffirmed its commitment to supporting women in the workplace.
"We will not comment on pending litigation other than to note that plaintiffs’ allegations are without merit, and KPMG will vigorously defend itself," KPMG US said in a statement.

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