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Memorandum: Toshiba America Class Action

We wanted be sure that you are aware of a nationwide class action filed January 31, 2011 in federal court in New York against Toshiba America Incorporated and one of its subsidiaries, Toshiba America Nuclear Energy Corporation ("TANE"). Collectively, Toshiba America Incorporated and TANE will be referred to in this memorandum as "Toshiba" or the "Company." The lawsuit, brought by a female human resources executive, alleges broad-ranging sex discrimination against women at Toshiba. It should be noted that the plaintiff is represented by the law firm that recently obtained a jury verdict against a large pharmaceutical company in a similar case, which later settled for more than USD $200 Million.

According to her complaint, the plaintiff was hired as the "highest ranking U.S. human resources employee at TANE." She alleges that the Company discriminates against its female employees in compensation, promotions and other terms and conditions of employment. In particular, she claims that, at Toshiba, "women are not seen as equals. If a female employee does not conform to typical gender stereotypes or is not submissive towards male employees, she is labeled insubordinate, criticized, and retaliated against." The plaintiff further asserts that "[a]lthough Toshiba publicly touts its commitment to gender diversity and its efforts to promote more female employees to managerial positions," there remains an "absence of women" in leadership positions.

Given the recent surge in sex discrimination class lawsuits, and particularly in light of the size of recent settlements, this latest development evinces a rapidly emerging — and obviously disturbing — trend. With respect to this specific case, the plaintiff makes a number of allegations in her complaint that understandably would sow concern in the heart of most any employer faced with such accusations. These allegations include:

  1. The Company touts its commitment to gender diversity, but in reality, its numbers in this regard reveal a lack of women in leadership positions companywide;
  2. The Company conducts sham internal investigations into discrimination complaints, and fails to take prompt and effective action to remedy discrimination complaints;
  3. If an employee complains to management about sex discrimination, she is subjected to heightened scrutiny, criticism and retaliation;
  4. The Company regularly discriminates against women by:
    1. Applying employment policies and practices differently towards women than towards men;
    2. Failing to pay women salaries, bonuses and other economic benefits when those women perform comparable work to men at the same levels of the organization;
    3. Placing women in positions with lower grades in terms of pay and promotional opportunities; and
    4. Favoring men over women in promotions;
  5. The Company fails to adequately discipline managers and others who violate anti-discrimination laws; and
  6. The Company bases advancement decisions on personal familiarity, subjective decision-making, pre-selection, and interaction among male managers, supervisors and subordinates, rather than by merit.

In the complaint, the plaintiff also alleges the following, specifically with respect to her own employment with TANE:

  1. After hiring the plaintiff to be the senior human resources executive at TANE, reporting directly to TANE's President and CEO, a more senior position was created, and a man with less experience was hired into that position;
  2. Once the man was hired into this more senior position, the plaintiff's responsibilities were stripped from her, and she was given responsibilities of lower level personnel and clerical staff;
  3. Although men were offered relocation expenses when they moved in order to take a position with TANE, those benefits were not offered to the plaintiff;
  4. TANE ignored its own subjective hiring criteria so that it could hire a "submissive woman" into a particular position for which the plaintiff was in the process of recruiting qualified applicants;
  5. After the plaintiff filed an internal complaint regarding this hiring decision, and eventually a charge with the Equal Employment Opportunity Commission ("EEOC"), TANE retaliated against the plaintiff by decreasing her workload, removing job responsibilities, and ordering her to engage in tasks beneath her level of authority; and
  6. Upon her return from a health-related leave of absence, the plaintiff was told that she must leave the office and not return "until further notice."

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Based on these and other allegations in the complaint, it may be prudent for your company to conduct an audit of its internal equal employment opportunity policies, practices and complaint procedures. It is equally important to ensure that employees with supervisory authority have been trained as to the full scope of their responsibilities under the law and the potentially costly consequences of their actions.

We would be happy to discuss such an audit and training with you, as well as steps you could take to maximize the likelihood that any such audit remains legally privileged.