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Arbitration Is No Guarantee of Lower Award

An arbitrator recently awarded $40 million to a plaintiff alleging gender discrimination against Kargo, a mobile advertising firm. Alexis Berger was a senior vice president. She claimed that Kargo allowed misbehavior by her male colleagues but disciplined her; ignored complaints about male executives; faulted her for being a “pitbull” while lauding it in male executives; and made inappropriate comments about her sexuality including propositioning her and her partner to have a “threesome.”

Kargo asserted that it fired her because she had problems with her managerial style, made inappropriate comments as well and that she refused a new position where she would not be managing employees.

The arbitrator issued an 83-page decision outlining how Ms. Berger had definitively proved gender discrimination was a motivating factor in the decision to fire her. She referred to Ms. Berger’s termination as a “collaborative orchestration carried out in a malicious, insidious, and humiliating manner ...” The $40 million includes money for back pay, emotional distress, and liquidated damages under the Equal Pay Act. Kargo has asked a federal district court to reduce the award to $3 million. It has argued that it would never have selected the arbitrator had she not left out material information in her background.