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$40 Million Arbitration Award in Gender Employment Discrimination Case

Earlier this summer, Alexis Berger, a former Senior Vice President, was awarded over $40 million by an arbitrator in her gender employment discrimination case.  The defendant is Kargo, which is a mobile advertising firm.

As reported by AdWeek, in August 2017, the employer (Kargo) filed a motion in federal court in New York to reduce the $40 million in damages to about $3 million.

If the $40 million award is upheld, it will take its place among the highest sexual harassment/discrimination verdicts and settlements.

Background

The case appears to have been handled relatively quickly given that Berger filed her EEOC charge of discrimination in spring 2016, and Kargo fired her in July 2016.

The following allegations were reported in AdWeek: prior to her termination on July 22, 2016, Berger was the agency’s highest paid employee and supervised nearly 30 employees.

Kargo allegedly treated Berger differently due to her gender in many ways, including:

  • tolerating misbehavior by male colleagues but disciplining Berger for similar behavior;
  • ignoring complaints against a male executive because “he was just being a boy;”
  • faulting Berger for being a “pitbull” while encouraging this trait among male employees;
  • inappropriate comments about Berger’s sexuality including a male executive talking about “flipping [Berger] back” [to heterosexuality] and propositioning Berger and her partner to have “a threesome with him”;

Kargo, on the other hand, claims that it fired Berger because of, among other things, complaints about her managerial style, because she declined to take a new position where she would not manage any employees, and because Berger made inappropriate comments herself.

Arbitration

Instead of filing her lawsuit in court, Berger’s claim was handled through arbitration.  When parties agree to arbitrate, it generally means they’ve agreed not file a case in court.  Instead, their legal dispute will be heard by a private, neutral, third party (the arbitrator).  The arbitrator will hear each side’s evidence and arguments and then making a ruling.  The arbitrator’s decision is generally binding on the parties and enforceable in court. Arbitration can take many different forms so it’s important to know what rules apply if you have signed an arbitration agreement at your job.

The Arbitrator’s decision

The arbitrator issued an 83 page decision in which she found that Berger had clearly proven her case of employment discrimination.  According to the arbitrator, “overwhelming” evidence showed that Kargo allowed sexual discrimination to be “at the very least” a motivating factor in Kargo’s decision to fire Berger.  And the termination was a “collaborative orchestration carried out in a malicious, insidious, and humiliating manner…”

Ultimately, the arbitrator awarded more than $40 million in damages to Berger, including money for back pay, emotional distress, and liquidated damages under the Equal Pay Act.

As mentioned above, Kargo has asked a federal district court to reduce the $40 million award to approximately $3 million.  Kargo alleges that the arbitrator should never have heard the case because, among other things, the arbitrator left out material information on her resume that, if included, would have resulted in her not being selected to hear the case.  It will be interesting to see how this unfolds in federal court, especially given that employers are generally the party seeking to promote and abide by the arbitration process and its awards (or lack thereof).

This article was updated and corrected on September 19, 2017.

© 2017 Zuckerman Law

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About this Author

Eric Bachman, Discrimination Attorney, Zuckerman Law Firm
Of Counsel

Eric Bachman is Chair of the Discrimination and Retaliation practices at Zuckerman Law and has served in senior positions at the U.S. Office of Special Counsel (OSC) and the Department of Justice Civil Rights Division.  Bachman’s wins include a $100 million settlement in a disparate impact Title VII class action, a record-setting Whistleblower Protection Act settlement at OSC, and a $16 million class action settlement against a major grocery chain.  Bachman holds extensive litigation experience, including trials in federal and state courts, and has also set important...

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