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Ernst & Young to Create $500k Scholarship Program, Pay $100k Penalty, Reform Policies Following Civil Rights Investigation

By rlsmetro on
New Jersey

Attorney General Gurbir S. Grewal announced today that the Division on Civil Rights (DCR) has entered into a Memorandum of Agreement with the professional services firm Ernst & Young LLP to resolve DCR’s investigation of whether the company violated the New Jersey Law Against Discrimination (LAD) by providing many of its female employees with training based on gender stereotypes.

Specifically, DCR’s investigation focused on a training program, which was developed by an outside vendor and which was used by Ernst & Young for more than four years between February 2015 and September 2019. The training program was national in scope, and portions of it were delivered in New Jersey.

DCR’s investigation concluded that the training program violated the LAD’s prohibition on employment discrimination based on sex, gender identity and gender expression.

As part of the Memorandum of Agreement, Ernst & Young has agreed to pay the State $100,000; to create a new $500,000 scholarship program to increase opportunities for employment in the accounting and finance industry for women and other populations underrepresented in the industry; and to implement a variety of policy, training and other reforms designed to ensure the company’s corporate culture and work environment comply with the LAD and do not encourage differential treatment of employees based on sex, gender identity, or gender expression.

 

“We are committed to ensuring that all New Jersey residents have the opportunity to thrive in diverse, equitable, and inclusive workplaces,” said Attorney General Grewal.  “Our Division on Civil Rights stands ready to enforce the Law Against Discrimination when employment practices reinforce gender and other stereotypes instead of promoting workplace equality.”

 

“Training programs that perpetuate gender stereotypes and present faulty science as fact can harm employees, exacerbate gender inequities, and stigmatize employees who do not conform to gender stereotypes,” said Aaron Scherzer, Chief of Strategic Initiatives and Enforcement at the Division on Civil Rights. “The robust and forward-thinking provisions in this agreement with Ernst & Young reflect DCR’s commitment to rooting out discrimination in workplaces across New Jersey.”

 

Ernst & Young has approximately 55,000 partners, principals and employees in the U.S. The company employs approximately 3,500 workers at three locations in New Jersey: Hoboken, Iselin and Secaucus.

 

The training at issue, called the Power-Presence-Purpose Training Program (PPP), came to DCR’s attention in 2019 after news reports concerning the PPP course described some of its content as outdated and offensive, as related by Ernst & Young employees who had attended the sessions.  

Through its investigation, DCR found that some of the training materials:

  • Were based on gender stereotypes and referenced gender-based “rules” that female employees were encouraged to follow;
  • Included purported “science” establishing “differences” between male and female brains, taken almost exclusively from a single, widely criticized source;
  • Included gender-based stereotypes about the skills of women and men in the workplace and expectations of their behavior; and
  • Assumed that all individuals identify as either female or male; that a person’s gender identity and expression are based on their assigned sex at birth; and that a person’s gender expression, including the way they act and dress, is in accordance with society’s expectation of that gender identity.

In addition to the $100,000 payment to the State and creation of a new $500,000 scholarship program, Ernst & Young already has taken actions to ensure that its professional development trainings comply with the LAD going forward, and has committed to changes that have implications for not just the residents of New Jersey, but the accounting and finance industries more broadly.

 

Within a year, and continuing annually for three years after that, the company will require all employees who live or work in New Jersey to take a course that focuses on gender equity, implicit bias, anti-discrimination and cultural competency.

The company has also agreed to offer the course – tentatively named Ethics Respect at Work – to all new hires beginning in fiscal year 2022.

Also within a year, and continuing annually for the next three years after that, Ernst & Young will provide DCR with data on the gender make-up of its employees and executives in the U.S. and New Jersey. To the extent available, the data is to include the number of company employees and executives who self-identify as men, women, transgender, non-binary, gender non-conforming and intersex.

 

When Ernst & Young provides the data, it will also provide DCR with a summary of its past and future initiatives – including, but not limited to, the new scholarship program required by today’s agreement – aimed at increasing the number of people it employs from groups underrepresented in the accounting and finance industry.

Ernst & Young has also agreed to continue a training evaluation and control program that it began using after it ended the PPP training. Through this program, which will continue for a minimum of three years, Ernst & Young performs a comprehensive review of its portfolio of learning programs to identify any materials that are inconsistent with its commitment to diversity and inclusion.

Ernst & Young also has agreed to provide its personnel a written and video statement reiterating its commitment to diversity and inclusion.