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.
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.
On Aug. 1, 2016, Colombaro was appointed as the arbitrator of the case. A hearing took place in early December. Colombaro’s 83-page ruling is dated May 31, 2017, and the award totals $40,925,284.20.
“The evidence is overwhelming that Kargo violated Title VII, NYHRL (New York Human Rights Law), and New York City Human Rights Law,” wrote Colombaro. “Additionally Kargo breached its implied obligation to act in good faith and fair dealing in the employment agreement by manufacturing reasons to label her termination as ‘for cause’ termination. The evidence exposed that Kargo labored under a double standard, treating Ms. Berger differently from its male managers, who were never even written up, reprimanded, or disciplined in any way for similar or worse behaviors it used to discredit her.”
According to the arbiter’s findings, examples of how Berger was allegedly sexually discriminated against include:
- “Obviously, being a ‘pitbull’ – having a ‘personality trait of aggressiveness’ – was not only considered to be a positive approach and an expectation, it was also part of Kargo’s culture for men. Ms. Berger was the only one faulted for it.” (Award, p. 21).
- “The use of profanity and inappropriately suggestive language was no less part of the men’s culture at Kargo than was politically incorrect and potentially offensive language. Their use of profane and inappropriately suggestive language was prolific – the lead coming from the top – starting with Kargo’s founder and CEO, Mr. Kargman, and continuing throughout the company. No one found it a problem, except when Ms. Berger used it – more evidence of a double standard.” (Award, p. 23-24.)
- “In [an] advertisement, [CEO Kargman] had placed on the cover of a major advertising magazine – ‘Advertising Age’ a picture of a used condom wrapper having Kargo’s name on it…. Another example involves a video he filmed for a national sales conference. Essentially, he promised employees that if they met their goals, he would ‘shave his balls.’ Ultimately, this comment was not used because Ms. Berger advised against it.” … Mr. Kargman admitted that his language is so bad he is now paying a coach to help him ‘kick the habit.'”… These are the three leaders of the company, using the same type of language and ‘humor’ for which they fault Ms. Berger.” (Award, p. 23-24.)
- “Kargo witnesses … admitted that (president and COO) Mr. McConville is, essentially, ‘hostile’ in his communications: ‘hot headed,’ ‘testy,’ ‘impatient,’ has a ‘temper’ and ‘shuts down’ when angry or his ideas are challenged. Notwithstanding, these emotional erratic behaviors were acceptable. … even though it has a detrimental effect on the process, on the other employees and their ability to express opposing views. Yet, he is not considered to be ‘too emotional.’ He is not faulted or disciplined while Ms. Berger is.” (Award, p. 25.)
- “These leaders were not the only ones with behavioral/managerial issues. Evidence was presented that there were numerous complaints from various women faulting [Ms. Berger’s peer] Mr. Canty’s behavior, his style of communication, and his management as being offensive and sexist, but he, too, was never reprimanded, disciplined or even written up. Rather, these complaints were ignored because, as Ms. Sybesma [Vice President of Human Resources] said, ‘he was just being a boy.'” (Award, p. 27.)
- • “[T]he evidence presented highlights the diverse way in which Kargo treated Ms. Berger versus her male counterparts regarding wages. It did not cut the base compensation or commissions of any other male executive at the company in 2016. These men behaved in the same or worse manner as that for which Kargo disciplined Ms. Berger. It did not even cut Mr. Canty’s pay. He held the same position as Ms. Berger and numerous sexual discrimination complaints had been lodged against him.” (Award, p. 54.)
- “Regarding options, a difference in treatment is also blatantly apparent; namely, Kargo permitted its Vice President, Mr. McConville, to work for Emogi in an advisory position and to receive equity compensation without penalizing him by taking away his Kargo options, inter alia. On the other hand, when Ms. Berger simply applied to Emogi for a job, she was terminated with Kargo avowing bogus reasons ‘for cause,’ depriving her of her vested options. Mr. McConville was bound by the same restrictive covenants Kargo relied on to terminate Ms. Berger and to ‘strip’ her of her options.” (Award, p. 55.)
See the full arbitration award document below:
