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New York Lawmakers Rebuke Ernst and Young’s Arbitration Policy

State Senator Liz Krueger (Photo provided by Justin Flagg)
State Senator Liz Krueger (Photo provided by Justin Flagg)

Today, a bipartisan group of 67 New York lawmakers in the State Senate and Assembly, led by State Senators Liz Krueger (D-Upper East Side, Lenox Hill) and Alessandra Biaggi (D-Bronx, Westchester County) sent a letter to Ernst & Young, reprimanding the firm for its policy of forced arbitration for sexual harassment claims.

Former EY partner Karen Ward was at the center of the incident that prompted the letter. Ward was a victim of extensive sexual harassment during her years at the firm, and in late 2018 she was fired (allegedly for not meeting revenue goals). When she tried to file a claim of sexual harassment with the US Equal Employment Opportunity Commission (EEOC), she was forced into arbitration.

This meant that her case would be examined by a private court outside the public justice system. Private arbitrators can charge parties up to $1,000 per hour to hear their cases, and Ward herself has had to pay over $185,000 for her arbitration proceedings so far.

“While the problems with forced arbitration are clear, the facts in this case are even more troubling,” reads the letter. “Ernst & Young has insisted that Ms. Ward pay half the costs of arbitration, which have already added up to $185,000 with the case still in the discovery phase.  If she had been permitted to file in court, she would have only had to pay $450 in court costs to have her case heard.  It is obvious to us that requiring claimants to pay such exorbitant costs is a major obstacle to justice for victims of harassment.”

Liz Krueger said that Ernst and Young’s arbitration policy belies its claims of being a progressive, egalitarian institution.

“For all the progress women have made to achieve equality in the workplace, some companies still have not gotten the memo that the days of the boys’ club are over,” said Krueger. “It is 2019, not 1959, and it is simply unacceptable to perpetuate a culture of harassment and discrimination at work. Ernst & Young clams to be a leader on gender equity, yet their forced arbitration requirements effectively slam shut the doors on their employees’ access to justice. They can and must do better.”

Alessandra Biaggi called the arbitration policy an abuse of power – one that only serves to silence victims of harassment by putting an exorbitant price tag on justice.

“Sexual harassment and discrimination in the workplace often derive from an abuse of power, and a forced arbitration agreement is a continuation of that abuse,” said Biaggi. “I commend Ms. Ward for coming forward, and demand that Ernst & Young eliminate this predatory policy immediately and start practicing the values they preach.”

The full letter can be viewed here.

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