Fired McKinsey ‘scapegoat’ expands damages claim against firm

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A fired McKinsey partner who says he was made a “scapegoat” for the company’s opioid work is expanding his demand for damages from the consulting firm following its $650mn legal settlement with the US government.

Arnab Ghatak claims McKinsey’s managing partner Bob Sternfels defamed him in a memo sent to staff and alumni after the agreement with the justice department this month, compounding earlier defamatory remarks by Sternfels and the firm, according to court documents.

Ghatak was one of two partners fired in 2021 for violating the firm’s professional standards because of an email exchange that referenced deleting documents.

The second partner, Martin Elling, was found to have actually deleted more than 100 files related to his work with Purdue Pharma, the maker of OxyContin, and agreed this month to plead guilty to obstruction of justice.

The absence of any Department of Justice action against Ghatak “vindicated” his position that he did nothing wrong, the former partner said on the day of the settlement.

McKinsey agreed to pay $650mn to avoid criminal and civil charges over its work advising Purdue and other opioid manufacturers, including aiding healthcare fraud and obstructing justice.

The consulting firm has now agreed more than $1.6bn in payments to federal, state and local authorities who claimed its marketing advice contributed to an epidemic of addiction that killed hundreds of thousands of Americans.

McKinsey says it regrets its opioid work. In statements since its first settlement with state authorities in 2021, it has said it stopped working for opioid manufacturers, introduced new procedures to vet consulting engagements, and fired two senior partners “for communicating about document deletion”.

Ghatak sued the firm earlier this year claiming his termination was unlawful and that he was used as a scapegoat at the time of the 2021 settlement. The statements by McKinsey and Sternfels imply he deleted documents and are therefore defamatory, his suit claims.

According to court filings, Elling messaged Ghatak in 2018, when US authorities were investigating Purdue, saying: “Just saw in the FT that Judy Lewent is being sued by the states attorneys-general for her role on the Purdue Board. It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other tha[n] eliminating all our documents and emails. Suspect not but as things get tougher there someone might turn to us.”

Ghatak replied: “Thanks for the heads up. Will do”

The lawsuit says that Ghatak’s response referred to checking with senior leadership about the risks of serving Purdue.

Ghatak is seeking to add a new claim based on events after this month’s deferred prosecution agreement with the justice department.

“The DPA underscores that Dr Ghatak at no time did anything wrong, including at no time improperly deleted documents,” according to a proposed amended complaint.

“Despite this unambiguous finding, McKinsey continues to defame Dr Ghatak, citing in a memorandum distributed to current employees and alumni . . . totalling around 100,000 people, that Dr Ghatak ‘discussed document deletion’ with another McKinsey partner. This false statement by McKinsey was a knowing bold lie, particularly given that McKinsey themselves just admitted to obstruction.”

McKinsey responded: “We believe Dr Ghatak’s claims are meritless, and nothing in his proposed new allegations changes that.”

The firm has been seeking to have the case settled in arbitration rather than in open court, and has signalled it will oppose Ghatak’s attempt to expand the suit. The admissibility of the amended complaint will be decided by a New York judge after a hearing next month.