Workplace Ethics Takes a Hit at EY

According to an Associated Press story published on September 24, Ernst & Young was hit with a second sexual harassment complaint in less than year firm.

Karen Ward, a former partner with EY, said her supervisor routinely commented about her breasts, suggested she should accompany him to strip clubs and texted her at 2 a.m. while on a work trip asking her to meet him for drinks. Ward said her supervisor and other men routinely met with clients at bars and strip clubs, excluding women from important business.

In a complaint filed with the Equal Employment Opportunity Commission, Ward said she faced retaliation after complaining to senior executives, including one who warned her to “be careful.” Ward, who worked in the North Carolina offices of EY, was fired this month after five years with the company.

EY, a U.K.-based company with 260,000 employees worldwide, called Ward’s claims “unfounded and baseless.” The firm said Ward was fired because of its decision to shut down the real estate investment banking advisory practice that she led for three years, calling it a “money-losing operation.” The company said she failed to close any transactions while she led the practice. This is common for accounting firms and all businesses, to blame the whistleblower for failing to meet responsibilities rather than address the true problem – a lack of ethics at EY and failure to comply with laws like sexual harassment.

This isn’t the first rodeo for EY. Ward’s complaint comes four months after EY reached a confidential agreement with another former partner, Jessica Casucci, who claimed that a fellow partner groped her in front of two male colleagues. Casucci, who also described harassment by other men at the company, said her career suffered as she avoided projects that would force her to work with the partner who groped her. She said her complaints to the company’s global diversity and inclusion officer went nowhere.

Michael Willemin, an attorney for Ward, disputed EY’s contention that Ward was fired for her work performance, saying she brought in $50 million in revenue during her time at the company and facilitated a deal that generated $5 million in fees shortly before she was fired.

“EY’s decision to try to trash Ms. Ward for exposing rampant discrimination and sexual harassment is appalling and just another example of a big company trying to bully a woman who reports misconduct,” Willemin said.

EY said Ward’s allegations were raised after she was told of her dismissal, and an independent investigation conducted by the Latham & Watkins law firm found them to be unsubstantiated.

However, Ward details complaints that she made starting in 2014, citing emails to senior executives. She claims she and her team were moved to a different division of the company in 2015 where her work was systematically undermined until she was fired.

Ward’s EEOC complaint says the supervisor who allegedly harassed her was fired in October of 2015. EY did not immediately respond to questions about the circumstances surrounding his departure.

Willemin, who also represented Casucci, said the EEOC complaint is a precursor to filing lawsuit against the company. He said Ward will demand that EY waive a requirement that sexual harassment complaints made by partners be settled through arbitration instead of the courts.

The culture of indifference at EY goes back to September 20, 2016, when the SEC announced that EY had agreed to pay $9.3 million in total to settle charges against three of the firm's audit partners that engaged in relationships that created threats to independence.

In one case, Gregory Bednar, a former senior partner on the engagement team of a public company client, "maintained an improperly close friendship" with the company's CFO, thus violating rules that ensure objectivity and impartiality during audits. Bednar reportedly spent close to $100,000 in travel and entertainment expenses between 2012-2015 while socializing with the CFO and his family.

The firm was aware of the expenses but did nothing. Without admitting or denying the findings, Bednar and EY consented to the SEC order. The firm agreed to pay $4.975 million in monetary sanctions for the violations. Bednar agreed to a $45,000 penalty and was suspended from appearing and practicing before the SEC as an accountant for three years but was allowed to apply for reinstatement after that time.

EY should be ashamed at itself. The once proud accounting firm has stooped to new lows in promoting an environment that seems to ignore sexual harassment.

Blog posted by Steven Mintz, aka Ethics Sage, on October 11, 2018. Visit Steve’s website and sign up for his newsletter. Follow him on Facebook and Like his page.