By Joseph Ax
NEW YORK, Feb 8 (Reuters) - A proposed gender discrimination
class action against accounting firm KPMG brought by five female
former employees who claim they were denied pay raises and
promotions can move ahead largely intact, a Manhattan federal
U.S. District Judge Jesse Furman rejected most of KPMG's
motion to dismiss the majority of the women's claims, finding
that their "allegations suffice to survive at this stage of the
In the case the women argue that the accounting firm created
a hostile work environment that left female employees lagging
behind in pay and promotions, particularly those with children.
The lawsuit is seeking $350 million in lost salary and benefits
as well as other damages.
In a statement, KPMG said the lawsuit is "entirely without
"Diversity and inclusion have long been priorities for the
firm, and they are woven into our culture and everything we do,"
the company said.
KPMG argued in court papers that the women, as former
employees, could not assert class status under a 2011 U.S.
Supreme Court ruling that derailed a nationwide discrimination
class action against Wal-Mart. That ruling, in Wal-Mart Stores
v. Dukes, denied certification on the grounds that 1.5 million
current and former Wal-Mart female workers could not show they
shared common injuries.
But Furman found that KPMG's argument was premature, since
the lawsuit had not yet progressed to the class certification
stage. It is "plausible" that the women in the KPMG case will
provide enough evidence to allow certification, based on their
allegations about a number of specific companywide
discriminatory policies, he wrote.
Furman limited or struck a handful of claims but allowed the
majority of the complaint to move forward.
Katherine Kimpel, lead counsel for the plaintiffs, said the
decision, together with other rulings on the Dukes issue, served
as a rebuke to the "overbroad" application of the Supreme Court
The case was brought by law firm Sanford Wittels & Heisler,
which has filed a series of gender discrimination suits in
recent years against major corporations and settled a similar
case against Novartis AG in 2010 for $175 million. The
corporations include French advertising company Publicis Group
SA, Japanese electronics maker Toshiba Corp, Bayer HealthCare
Pharmaceuticals and health insurer Cigna Corp.
The case is Kassman v. KPMG LLP, U.S. District Court,
Southern District of New York, No. 11-cv-3743.
For the plaintiffs: Katherine Kimpel, Kate Mueting,
Katherine Lamm and David Sanford of Sanford Wittels & Heisler.
For KPMG: Cheryl Stanton, Diane Saunders, Peter Hughes and
Steven Moore of Ogletree, Deakins, Nash, Smoak & Stewart.
Follow us on Twitter @ReutersLegal | Like us on Facebook