November 20, 2018

Ex-EY Manager’s Paternity Leave Lawsuit Against Firm Is Heading to Arbitration

A dispute between EY and a former senior manager who claims the firm fired him after he requested additional paternity leave after the birth of his child must be settled in arbitration, a federal judge in Philadelphia said last week.

The plaintiff, Shmuel Eisenbach, didn’t prove that anything in the EY arbitration agreement he signed “unreasonably or grossly favors” the accounting firm, U.S. District Judge Michael Baylson said on Oct. 15.

In addition, the judge didn’t buy Eisenbach’s claim that the arbitration agreement was “fraudulently induced.”

During oral argument, [Eisenbach]’s counsel informed the Court that [Eisenbach] electronically signed the employment agreement. [Eisenbach]’s counsel argued that because the arbitration program had the stated intent of creating “a fair, prompt, and cost-effective mechanism for resolving disputes,” and it would not do so, it was fraudulently induced. This statement, without factual support, is insufficient to demonstrate fraudulent inducement.

In a lawsuit filed in the U.S. District Court for the Eastern District of Pennsylvania on April 20, 2018, Eisenbach accused EY of violating the Pennsylvania Human Relations Act, the Family and Medical Care Leave Act (FMLA), and Title VII of the Civil Rights Act.

According to court documents, Eisenbach, who was hired by Ernst & Young Israel in June 2006, was sent an offer letter on March 18, 2014, for the position of senior manager in the Advisory Services Practice in EY’s Philadelphia office. The letter stated that:

This offer is contingent upon your agreement that any dispute, controversy or claim (as defined in the EY Common Ground Dispute Resolution Program[)] arising between you and EY will be submitted first to mediation and, if mediation is unsuccessful, then to binding arbitration in accordance with the terms and conditions set forth in AA7523, which describes EY’s Common Ground Dispute Resolution Program. By signing this offer, you acknowledge that you have read and understand the EY Common Ground Dispute Resolution Program (AA7523) and that you shall abide by it.

Eisenbach signed an employee agreement the following day that contained language regarding disputes with the firm that was similar to what was said in the offer letter.

After the birth of his child on Feb. 7, 2016, Eisenbach took a leave of absence under FMLA from Feb. 8, 2016, through Feb. 22, 2016. Court documents show that on May 4, 2016, he asked EY for extra paternity leave under FMLA. He was fired six days later on May 10.

Although EY claims Eisenbach was fired for “poor performance,” he believes he was fired for requesting additional paternity leave and that his gender was “a motivating and/or determinative factor in the decision to terminate his employment.”

According to the 2018 Working Mother 100 Best Companies list, in which EY was included, and even made the top 10, “primary caregivers who have been with the professional-services firm for a year are eligible for up to 16 weeks of fully paid time off when welcoming a child through birth, adoption, surrogacy, foster care or legal guardianship. Each new dad receives an email encouraging him to take his leave.”

I guess the email doesn’t say “and don’t even THINK about taking any more time off than what we give you!”

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Newman said he had always been confident that BDO International’s arms-length approach would be proved but added: ‘There is still the risk of a further appeal, as well as the appeal by the US firm.’

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