EY Switzerland Managing Partner Accused of Sexual Harassment Has Been Relieved of His Duties

The outside investigation into accusations of sexual harassment at EY Switzerland has been completed, and the accused harasser, a male managing partner who also served as the firm’s chief talent officer, has been shown the door.

But according to published reports in Switzerland and confirmed to Going Concern by several sources, the law firm engaged to lead the independent investigation never spoke to the alleged victim, a female associate who no longer works at EY Switzerland, even though she agreed to be interviewed.

How in the hell do you have an investigation of sexual harassment within a workplace without talking to the person who made the claim in the first place? That, to me, does not constitute a “completed investigation.” That, to me, is fucked up.

In an internal email sent on Jan. 25, which was obtained by Zurich financial news website Inside Paradeplatz, Julie Linn Teigland, EY’s regional managing partner for Germany, Switzerland, and Austria, told colleagues:

On Friday, 14th December 2018, we wrote to you following news reports and allegations of inappropriate workplace behavior in relation to a Swiss partner and a former employee. The independent investigation that we announced has now been completed.

While the investigation concludes that there was an improper behavior by this partner, it also concludes that there was no sexual harassment under Swiss law. Reflecting on the above, EY Switzerland and this partner have agreed that he will leave the firm.

We’ve reported that the chief talent officer at EY Switzerland is Stefan Marc Schmid, who on his now-deleted LinkedIn profile had mentioned that he also is a managing partner at the firm. Sources have confirmed to Going Concern that Schmid is the managing partner who was accused of sexual harassment and no longer works at EY.

I’ll admit, I’m no expert on Swiss labor laws, so I fired up the ol’ Google machine and came across this blog on the website of U.S. law firm Fisher Phillips, which talks about employment law in Switzerland and, in particular, discrimination and harassment:

The Swiss Gender Equality Act and the Federal Act on Equal Treatment of Women and Men also expressly prohibit sexual harassment of employees. Sexual harassment is defined to include threats, the promising of job-related advantages or coercive acts to obtain favors of a sexual nature. Swiss employers by law are required to take all reasonable steps to prevent sexual harassment.

Now, let’s take a look at the accusations the former female associate made against Schmid, which she first reported to EY Switzerland in 2016 when she was 29 years old:

  • He would call her “Barbie” because of her blond hair and slender figure, which she didn’t like.
  • He told her in a restaurant (German to English translation), “Your figure is not yet bikini-ripe.”
  • After she told him she had a lot of work to do but said at least the temperature outside is 25 degrees Celsius, he replied, “25 degrees, a perfect opportunity to show your assets in a skirt.”
  • After she politely made it clear that she didn’t want “inappropriate contact” with him, he warned her in his office, “Do not try to destroy my reputation. If someone leaves EY, that’s you, not me.”
  • He ordered her to informal and private meetings, where he told her, “By the way, I find it unbelievable that you do not want to have sex with me,” and “I could replace you with any other employee right away.”

How is this not considered sexual harassment under Swiss employment law? One source told me they were as perplexed as I am:

Criminal charges under code 198/199 of the Swiss penal code was never an issue, given that Mr. Schmid never had forced sexual intercourse with the victim. It was, however, clearly a gross breach of Swiss labor code (which can also entail criminal charges—but under labor code, not criminal code), as well as a gross violation of EY Code of Conduct (which Teigland acknowledged).

EY Switzerland conducted an internal investigation in 2016 after the female associate told the firm about the alleged harassment, but the firm concluded the allegations weren’t credible based on the information available at that time.

The female associate left the firm in late 2016, but at least she was given 10 months of pay, plus holiday compensation, as part of her exit package. It was reported that Schmid wasn’t reprimanded at that time—he just received a “warning” and was actually promoted by CEO Marcel Stalder.

But when Swiss media outlets like Inside Paradeplatz and Tages-Anzeiger newspaper brought these allegations back into the spotlight late last year, EY Switzerland took another look at the sexual harassment claims and hired one of Switzerland’s top law firms, Lenz & Staehelin, to conduct an independent investigation.

The firm also suspended Schmid, pending the outcome of the law firm’s findings.

According to a Jan. 25 Tages-Anzeiger article, EY Switzerland said the law firm reviewed all the information that was available and conducted interviews “with all relevant persons”—except for, you know, the person who should have been No. 1 on its list:

[Translated from German to English]

The [ex-] employee was contacted shortly before Christmas by EY and invited to discuss the matter. The intention is to end the investigation as soon as possible, according to a letter in which this newspaper had insight, preferably until the end of 2018. This was not possible because the employee stayed overseas until mid-January. But she offered several times written statements. She was informed that her cooperation was not compulsory, as it was only necessary to investigate whether the correct measures had been taken on the basis of her complaints.

Yesterday, [Teigland informed staff] in an internal letter that the investigation had been completed, that the case of sexual harassment was not criminally relevant. This finding is trivial insofar as criminal law was never discussed. Rather, it was behavior that contradicted Ernst & Young’s internal guidelines.

I just find it unconscionable that Lenz & Staehelin couldn’t wait a few weeks until the alleged victim returned to Switzerland to talk to her before concluding its investigation. According to one source with knowledge of the investigation, the ex-associate let EY Europe, Middle East, India and Africa (EMEIA) and the law firm know that she was going on vacation for four weeks and would be back on Jan. 21. And once she returned, she would be available to answer the law firm’s questions. The source added:

Nothing with the investigation was thorough; “as fast as possible” was the motto. It was quite obvious that EMEIA was at NO point interested in finding the truth and a “thorough” investigation.

But the dominos are starting to fall. Not only was Schmid let go but Stalder, the firm’s CEO since July 2016, resigned on Jan. 18. Sources say Stalder and Schmid are tight.

Then there’s this whole lap-dance thing that happened at an EY Switzerland holiday party a few years ago, in which a partner in the firm’s banking practice got an erotic lap dance from his secretary. Neither one was reprimanded by the firm, but apparently the partner is pissed off at Inside Paradeplatz for originally reporting that the lap dance occurred and is threatening legal action, even though his name hasn’t been published (except for being called “the lap dance man”) and the reporter was just doing his job.

The “lapdance” man among the EY partners has turned on a Zurich media lawyer based on the incident stories. The latter requires that his client be “completely excluded from the reporting in connection with the mentioned harassment case or further allegations against EY and that neither by his name, his initials nor in any other form which allows him to draw conclusions about himself (…) to call in a similar context”.

One source told Going Concern that the lap dance is a “total violation of EY’s Code of Conduct,” and added that an investigation “would make it obvious that a lot of high-ranking people failed after the lap dance, because they made sure that no investigation had been launched back then.”

Good luck to whomever has to fix this mess as the next CEO of EY Switzerland. He or she is going to need it.

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