Julia Irvine 26 Sep 2018 10:30am

EY US faces second sexual harassment case

A former partner at EY US has accused the firm of “misogyny” and discriminatory sexual harassment and is suing for compensation

Karen Ward has lodged a complaint at the US Equal Employment Opportunity Commission (EEOC) in which she claims that women in the firm are “underpaid, under-promoted and subjected to sexual harassment and all forms of disparate treatment”.

When they complain and ask to be treated with dignity and respect, she adds, “they are retaliated against and marginalised even further”.

The Big Four firm has responded with a strongly worded rebuttal, describing her complaint as “unfounded and baseless”.

“She was separated from EY following the firm’s decision to shut down the small real estate investment banking advisory practice that she led for three years,” it said in a statement.

“Despite the firm’s full support, Ward failed to close a single transaction in the period she led the group, and it suffered multiple years of disappointing financial results.

“The decision to close this money-losing operation and separate Ward was wholly unrelated to her gender. Her allegations of harassment retaliation and unfair pay were raised after she was informed of her separation.”

According to the complaint, Ward joined EY’s transaction real estate (TRE) group where she alleges she was subjected to a hostile working environment and harassment by her then supervisor, his boss (a current EY partner) and an executive director.

She accuses the three and other TRE members of regularly entertaining clients at bars and strip clubs which ensured that “women would be excluded from important client outings”.

She says that her supervisor would discuss the trips and suggest she should go with him to “titty bars”. He would also tell her he loved her “great big round boobs” and that she had “a nice ass”.

She also complains that some men at EY bragged about placing their chairs so they could look up a junior female employee’s skirt.

Ward made “numerous complaints”, often in writing, to the head of TRE but he took no action to remedy the situation. Rather, she alleges, “in an effort to silence” her, the firm moved her and her team out of TRE into the Ernst & Young Capital Advisors (EYCA) group.

According to the complaint, when she was moved, an EY principal told her, “there is an issue here because you are a woman” and “women do not succeed here [at EY]”. He also told her that because of her complaints, she wouldn’t get any referrals for business or assistance.

At the same time, a partner allegedly warned her to be careful with her complaints in case she was “perceived as bitchy”.

Ward says that her time at EYCA – as the only woman partner out of 19 – was made difficult by TRE staff violating securities laws and regulations and “continuing to run her business in direct competition with what she was supposed to be doing in EYCA. When she complained, she was told to “lighten up” and no remedial action was taken.

As a result of the discrimination and retaliation, she found it impossible to meet her 2017 revenue targets, Nevertheless the firm upped her 2018 target to a figure “significantly higher than the target given to many of her male peers who had bigger staffs and who were actually being supported by EY”.

She failed to meet the target before the close of the 2018 financial year although shortly afterwards, in July, she facilitated a transaction which resulted in a $5m fee for EY. This far exceeded her revenue target. Despite this, however, in August 2018, EY told her they were letting her go on 31 October, “purportedly because her business was ‘not profitable’.”

This, the complaint claims, is patently untrue since throughout her five years' employment at EY she was responsible for approximately $50m in fees paid to EY.

The complaint also alleges that Ward was paid “substantially less than her male peers” to the tune of “hundreds of thousands of dollars”.

In its statement, EY says that it commissioned lawyers Latham & Watkins to carry out an extensive and independent investigation into Ward’s allegations. This concluded that they were “completely unsubstantiated”.

“Our review also confirmed that throughout her career at EY, Ward was paid fairly and equitably for her work. EY will vigorously defend our firm and our people in contesting these claims.”

The firm adds that it is committed to a diverse, inclusive and safe workplace, “free of harassment or discrimination of any kind”, and that it promptly and thoroughly investigates any claims brought to its attention.

This is not the first time the Big Four firm has faced a sexual harassment and discrimination complaint lodged in the EEOC by a female partner. In April this year, Ward’s lawyers, Wigdor LLP, filed a complaint on behalf of EY partner Jessica Casucci, claiming that EY had ignored her complaint about sexual harassment by a fellow partner and that as a result her career had suffered. In her case, the firm settled shortly afterwards.