Here's a doozy. The Pittsburgh Post-Gazette reports that PPG Industries may sell its flat glass business to Mexico-based Vitro, SAB de C.V. This according to "a document obtained by" the paper:
A PPG spokesman this afternoon declined to comment on a possible sale, which is mentioned in an undated reference contained in a draft copy of an independent auditor’s report.
Oops! For those who don't know, that independent auditor is none other than PwC and the firm is probably hard at work on the second quarter 10-Q. Our tipster, a person who is familiar with PPG, speculated as to how the document could've ended up in the hands of a reporter at the Gazette:
I pray, PRAY that it was the team from PwC that left […] this undated audit report around somewhere [and] a reporter saw it. Probably someone's roommate. PPG releases earnings next Thursday, and they typically announce deals the morning before earnings release.
Sure enough, PPG announces earnings next Thursday before the markets open. Now, it's possible that someone from PPG left the report lying around, but our tipster is skeptical:
Yes, PPG would have a draft copy of the report, but PPG uses the Workiva cloud-based SEC reporting tool, everything is retained in the cloud, including the audit report.
So of course we can't conclude that someone at PwC is responsible for the leak, but it does serve as a good reminder to for everyone to be extra careful with client information. We'll see what happens with their earnings report next week.
An email to PwC seeking comment was not immediately returned.
~ Update below with link to audio of the proceedings
Last month we caught you up on Campbell v. PricewaterhouseCoopers, the wage and hour lawsuit filed by employees of the firm, claiming to be non-exempt and thus available for overtime. Oral arguments were heard today at the 9th Circuit Court of Appeals in San Francisco and it marks the most recent step in a case that could have wide repercussions in California. Francine McKenna has a good rundown over at Forbes, including sta��������������������rshaw, the plaintiffs’ attorney. PwC and their lead counsel, Dan Thomasch of Orrick, have declined to comment at this time.
In today’s proceedings, both sides were allowed to make their arguments and answered questions from a three-judge panel. We’ve obtained the briefs for both sides and we’ll give you a taste of each. First, from the plaintiffs:
PwC argues that Attest Associates satisfy the Professional Exemption because—notwithstanding the routine and nondiscretionary nature of their work—PwC claims that they are functionally indistinguishable from fully licensed accountants, doctors, lawyers, and engineers. As a matter of law, however, the text, structure, and drafting history of the Professional Exemption limit its application to licensed accountants, and Associates are not licensed. Second, PwC argues that Attest Associates satisfy the Wage Order’s Administrative Exemption because they work “under only general supervision” despite up to six layers of managers who are responsible for Associates’ work. That argument fails, however, because PwC has not pointed to sufficient evidence to create a triable issue of fact that Associates “work along specialized or technical lines”—much less that they do so “under only general supervision”—as required by the Administrative Exemption.
The argument goes into detail from there addressing three key arguments: 1) The Professional Exemption Does Not Apply to Attest Associates; 2) The Administrative Exemption Does Not Apply to Attest Associates; 3) The Rules Governing Professions Other Than Accounting Do Not Help PwC. You can see the brief in its entirety on the next pages.
PwC addresses all three arguments in their brief; this is a portion from the brief’s introduction:
Put simply, nothing in the Wage Order precludes unlicensed accountants from being shown to be exempt under subsection (b) of the Professional Exemption. Plaintiffs’ argument that the “drafting history” of the wage order at issue shows an intention on the part of the [Industrial Welfare Commission] to prohibit unlicensed accountants from being professionally exempt should be rejected, because the language and structure of the Professional Exemption are not ambiguous, and contain no such prohibition. Even the District Court did not accept Plaintiffs’ tortured reading of the text of the Professional Exemption, or claim to find unambiguous intent on the part of the [Industrial Welfare Commission] to exclude from eligibility for the Professional Exemption all unlicensed members of the accounting profession — and inevitably by extension, all unlicensed lawyers, doctors, dentists, optometrists, architects, engineers, and teachers. Doing so is flatly contrary to the overriding principle governing application of exemptions from overtime provisions, which is to consider individual employees’ work duties.
And their brief outlines a direct counter to the plaintiffs’ brief: 1) Plaintiffs’ Argument That Accountants Can Only Qualify for a Professional Exemption Under Subsection (a) Is Unsupportable 2) PwC Is Entitled to Show That Its Attest Associates Satisfy the “General Supervision” Requirement of the Administrative Exemption; 3) The Impact of the District Court’s Order Is Not Limited to the Profession of Accounting.
So what we’ve got here is…failure to agree on how the ambiguous (or not) California law is and how it applies specifically to unlicensed audit associates. Are they really just cogs in the wheel, bowing to their superiors as the plaintiffs argue? Or are they responsible professionals who are engaged in a challenging occupation that warrants exemption? The 9th Circuit will have transcripts and audio from the proceedings available on its website at some point tomorrow and we’ll update this post with them when they’re available. As for a resolution, it will be several months before we find out what the 9th Circuit rules and then, there’s still a trial to be had. Stay tuned.
