Former Kargo Sales Exec Awarded $40 Million in Arbitration Over Gender Wage Discrimination, Wrongful Termination

Arbiter says treatment was 'malicious, insidious and humiliating'

Alexis Berger was mobile ad firm Kargo's highest paid employee before being ousted. Emogi
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Alexis Berger, former svp of sales for the Midwest and West Coast offices of mobile advertising company Kargo, has been awarded more than $40 million in a third-party arbitration ruling obtained by Adweek.

The case alleged that Berger had been a victim of gender discrimination, retaliation, equal pay violation, violation of wage law and breach of contract.

According to testimony and memos from Kargo executives, Berger was placed on leave for poor performance and rude treatment of her employees, then terminated for cause after violating a noncompete clause.

The arbiter, however, eviscerated the company’s claims by detailing alleged inconsistencies, inaccuracies and poorly handled internal investigations into Berger’s performance.

“Sexual discrimination was, at the very least, a motivating factor in her termination,” wrote Judge Billie Colombaro, the arbitrator of the case, in her 83-page ruling (see full document embedded at the bottom of this article). “This was a collaborative orchestration carried out in a malicious, insidious, and humiliating manner, having the effect of depriving her of her earned commissions, her retention bonus, her stock options, her position, her livelihood, and her dignity.”

Kargo disputes the arbiter’s assessment and plans to fight the decision.

“For 14 years, our company has endeavored to provide full and equal opportunities to our employees, and it is at the core of our culture,” a Kargo spokesperson wrote in a statement e-mailed to Adweek. “Alexis was a close friend of our founder and was the highest paid executive in the entire company. We believe that the award rests upon a manifest disregard of the NY Law and will, at a minimum, be substantially set aside. We look forward to telling the full story in our upcoming legal filings.”

Arbiter Colombaro found multiple examples of what she described as evidence Berger was treated differently and more harshly because she was a woman.

In some cases, Colombaro found that male staffers were not disciplined when they “behaved in the same or worse manner as that for which Kargo disciplined Ms. Berger,” noting that complaints by women against an abrasive male executive were ignored because, per the HR manager, “he was just being a boy.”

But Berger was also targeted with inappropriate comments based on her gender and sexuality, the document says, specifically citing incidents allegedly involving Kevin Canty, Kargo’s svp of sales for the east.

“At retreats, [Canty] would comment on [Berger’s] sexuality and talk about ‘flipping her back.’ (She is gay.) He also asked her and her partner in Cannes to have ‘a threesome with him,'” wrote Colombaro in the award.

Timeline of events

Berger was hired in August 2012 when Kargo was still considered a “start-up,” according to the arbitration documents, and she reportedly helped grow the company from $5 million in annual revenue to $135 million in annual revenue at the end of 2015.

Initially hired as the vp of sales for the company’s midwest territory, Berger was promoted in August 2015 by Kargo CEO Harry Kargman, putting her over the company’s West Coast sales operations as well. Before her termination she managed nearly 30 employees and was the agency’s most highly paid employee.

"My peers said they wished I didn't always have Berger's back, that I was too close to her, and that's why they kept things from me."
Kargo CEO Harry Kargman in arbitration testimony

Kargman and Berger had a “very close, synergistic relationship, personally and professionally, based on mutual respect, business values and trust,” according to the arbitration documents, with Kargman considering himself to be Berger’s “work husband.”

That relationship allegedly bothered Kargo President and COO Ryan McConville and Chief Strategy Officer Doug Rohrer, the documents say.

“My peers said they wished I didn’t always have Berger’s back,” said Kargman in his testimony, according to the documents. “That I’m (sic) was too close to her and that’s why they kept things from me; I give her the benefit of the doubt more than I should. Ryan said he was unhappy I was always taking sales’ side.”

On Feb. 17, 2016, Berger, who was based in Chicago, was asked to come to the New York office and meet with Kargman, Roher and McConville. During that meeting Rohrer allegedly told Berger that there were “serious concerns raised about her behavior” and that an employee had come forward to say that “working for [Berger] was like being in an ‘abusive relationship.'”

After that employee came forward, Berger was told, Kargo reportedly “conducted an investigation” and was in the process of “compiling the results.”

Later that month, on Feb. 26, 2016, Berger received a retention bonus of $100,000 along with a letter that said the bonus was meant to “incentivize you to continue providing your current level of service to the company.” (The documents below also detail several instances of praise about her performance in the six months before her termination.) Less than two weeks later, according to the documents, Berger was “placed on a termination track.”

“[Joy Sybesma], the newly hired HR vice president who reports to McConville and does his bidding, met with Berger to warn her, essentially, that she must change her personality and management or be terminated,” wrote Colombaro in the arbitration ruling.

Sybesma told Berger there were “some performance areas of concern” including “unprofessional behavior, inconsistent approach to management, withholding information from your team or your superiors” and that it was “imperative that [Berger] begin demonstrating improvements in these areas … failure to do so may result in further disciplinary action up to and including termination of employment,” according to the arbitration document.

Berger asked for specific examples of her allegedly poor performance, “but Ms. Sybesma refused to give them,” the documents say. Still, Berger “took immediate steps to comply with the plan” to improve her work, Sybesma wrote in a memo dated March 9, 2016. Berger agreed to weekly life coach meetings, registering for management training at her own expense, a weekly touch-base with HR and having frequent one-on-one conversations with her staffers—one of whom later reported to management that Berger had shown “an improvement in overall communication, skills, attitude and the relationships she is trying to foster” within her team.

In early March, McConville went to Chicago, conducted interviews with employees, and reportedly cited the information he gathered as justification for putting Berger on paid leave. The arbiter criticized McConville’s approach to the investigation, saying he did not speak directly to Berger and only interviewed four staffers—Berger had 30 employees—while declining to talk to “anyone who would be in Ms. Berger’s favor.”

Citing “the fear of a large-scale mutiny,” McConville allegedly proposed putting Berger on a leave of absence, but HR “advised against it.”

The road to termination

In early April, Berger was informed that she had been reassigned, would have no employees to manage, would have her salary cut from $375,000 to $250,000 and “must report to the new job on April 25, 2016 or be terminated,” according to the arbitration document.

Berger’s lawyer, in late April, let Kargo know that Berger would not “accept this and that Kargo is discriminating against her by taking these actions, not having properly vetted the complaints against her and by not having investigated complaints she previously made against McConville; therefore she is filing an Equal Employment Opportunity Commission (EEOC) claim against Kargo,” summarized arbiter Colombaro.

Berger was not terminated from Kargo but was placed on unpaid leave on May 2 for “failure to return to work on April 25.” On May 30, Berger was not paid commissions for her work during the first quarter ($171,491.86) as well as the additional earnings ($133,639.47) up to May 2, the arbitration document states. On June 3, Berger filed a Demand for Arbitration “based on sexual discrimination via a double standard/stereotyping.”

During this time, Berger began interviewing for a job at visual messaging platform Emogi, which Kargo execs allegedly saw as a violation of their noncompete clause—despite, the arbiter notes, the fact that Berger was only interviewing and that male employees had been permitted to advise Emogi or even take a job there without being seen as noncompete clause violations.

On July 22, 2016, Kargo notified Berger by a letter from a company lawyer that she had been terminated for cause. Under a for cause termination, Berger would lose the entirety of her Kargo stock incentive plan, she would have to repay her $100,000 retention bonus and “forfeit her already earned commissions,” according to the arbitration ruling.

"The evidence exposed that Kargo labored under a double standard, treating Ms. Berger differently from its male managers."
Judge Billie Colombaro

@KristinaMonllos Kristina Monllos is a senior editor for Adweek.