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New York State Legislature Strongly Urges Ernst and Young to Drop Arbitration

A bipartisan group of 67 New York State Senators and State Assembly Members wrote a letter to Ernst & Young urging it to end mandatory arbitration for sexual harassment claims. These 67 members (mostly Democrats) makeup nearly 1/3 of the state’s legislative bodies.

In the letter, the lawmakers argue against the enormous costs resulting for employees seeking to arbitrate their claims, asserting that it “effectively slam[s] shut the doors on their employees’ access to justice” and is a continuation of the abuse suffered in the workplace. This letter was prompted by costs incurred by Ernst & Young employee Karen Ward for her arbitration. Ms. Ward alleged that she was subjected to sexual harassment by her boss, a firm partner. She complained and then asserted that she was fired in retaliation. To fight back, she had to pursue arbitration under the company’s mandatory arbitration policy. Thus far she has to pay $185,000 in fees to have three private arbitration judges hear her case. Ernst had refused to pay the costs of the arbitration and the arbitrators ordered the costs split. These costs will increase as the arbitration goes forward. By comparison, court fees would have cost her $450.00. Ward had asserted the high fees made her employment agreement unenforceable and is seeking declaratory relief from the court.

Ernst & Young was pressed to reconsider its approach by the legislators, accusing the company of failing to live up to its expressed goals for women. “[I]t is time for Ernst & Young to move beyond lip service and make the systemic changes necessary to truly be a leader in addressing inequality in the workplace.”