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Harassment claims surface in Gallagher dismissal suit

A former Arthur J Gallagher (AJG) senior vice president is suing the broker and an alleged member of the Gallagher family for at least $12.5mn, claiming she was sidelined for reporting a number of sexual harassments.

Karen Williams, who previously headed up the broker's New York commercial accounts division, is suing AJG and its regional executive vice president Patrick Kennedy after claiming she was "forced" to resign.

Williams was hired at the beginning of 2011 to salvage the broker's "faltering" middle-markets account division, according to court documents filed by her lawyers.

But her fortunes changed after Kennedy was appointed to lead the branch the following year.

In a complaint, filed with a New York County Court on 18 August, Williams claimed that Kennedy - who is alleged to be a member of the Gallagher family - "simply did not have the experience or knowledge" for the job.

"It was widely discussed that his assignment was purely nepotistic," she claimed, adding that he was "particularly unknowledgeable about the New York market".

The complaint alleged that early in his tenure, Kennedy was told that a vice president in the firm - who is not named in court documents - had a "very serious" drinking problem that was "adversely affecting" his work, rendering him "neither trustworthy nor dependable" and his performance "dismal".

Kennedy allegedly told the broker's management that he would deal with the unnamed executive's poor performance. However, "to the shock of employees", when the vice president handed in his resignation, Kennedy refused to accept it.

Instead, Kennedy allegedly took the man "out for drinks" - despite being "well aware" of his drinking problem - and convinced him to retract his resignation by offering him a $40,000 pay rise.

Williams said she was "dismayed" to learn that the man would be earning the same salary as she was despite him being two ranks beneath her.

Shortly after that, in 2013 Williams was scheduled to have surgery on her foot, which required her to take three weeks off work on medical advice.

But Williams alleged that Kennedy was "so outraged" when he found out she would be taking the time off that she feared she would lose her job if she did not agree to work from home just three days after the surgery.

Whilst she was working from home, Williams claimed that she received a phone call from a junior member of staff accusing the unnamed vice president of sexual harassment.

The vice president allegedly forced the junior to meet him at a bar during work hours and told her that he would fire her if she did not "make out" with him.

Williams forwarded the complaint to the human resources department but she said it appeared that the New York office had attempted to "bury" the complaint.

When she returned to work, Williams said that Kennedy's behaviour had changed drastically.

He scheduled a meeting with Williams to discuss the allegations that had been levelled against his "most favoured employee", who was allegedly continuing to drink during work hours.

"Let's talk about [the junior associate]. I don't even know what happened, I haven't read her complaint," Kennedy allegedly said when asking whether Williams believed the allegations.

Williams told him that she believed the complaint because she had also been treated "vilely" by the vice president.

The unnamed vice president was fired a few days later. Kennedy allegedly told Williams that it was the hardest thing he had ever had to do. Subsequently, Williams claimed she was forced to resign after her bonus was slashed and she was denied a raise. After she resigned, AJG "clawed back" the bonus by withdrawing it from her account.

AJG denied that Kennedy was a member of the Gallagher family but declined to comment further.

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