Last summer we initiated our coverage on the wage and hour lawsuits against the Big 4 and other firms that have been filed in California. As you may remember, the case that is currently before the 9th Circuit Court of Appeals, Campbell v. PricewaterhouseCoopers, is the key case as it may decide how the rest of the cases proceed. Just a quick refresher: These suits were filed by non-licensed associates who believe they were misclassified under California law as exempt professionals and are due overtime and other benefits due to non-exempt employees. The primary issue before the 9th Circuit has to do with whether or not, under the professional exemption, an associate is required to be licensed by the state of California in order to qualify for exempt status. The implications of the suit could change the face of public accounting. On one hand, accountants may find themselves in the position to earn more money in the short term. On the other, clients may shift focus away from Big 4 auditing services, or, when using Big 4 services, engage primarily manager-level and other exempt professionals to avoid overtime charges. We checked in with the lead counsel for the plaintiffs, Bill Kershaw, for the latest and we happened to catch him on the day (last Friday) that they were filing their opposition brief with the court. PwC filed its opening brief back in the fall, along with amicus (i.e. friend of court) briefs following in early November. The plaintiffs' amicus briefs are scheduled to be filed tomorrow and while Mr. Kershaw would not share any names with us, he did inform us that there were some notable supporters that will be filing briefs. Parties claiming support via web (though it is not clear whether they are expected to file as amicus) include among others, labor union UNITE HERE. The briefs are under seal at the request of the defendants who are claiming proprietary privilege. In the past, the 9th Circuit has been accused of having a liberal bias which could be perceived as an advantage to the plaintiffs. While Mr. Kershaw agreed that the 9th Circuit was more "worker friendly" in the past, he told us, "After eight years under the Bush administration, the court has considerably more conservative justices." According to the 9th Circuit's website, former President George W. Bush appointed seven justices while in office. Of the 47 justices currently serving, 21 were appointed by Republican Presidents and 26 by Democratic Presidents. Despite the political makeup, Mr. Kershaw believes, as he did when we last spoke with him on the matter, that the evolution of the law of the exemptions (i.e. who, among other things, is and is not eligible for overtime) will demonstrate that the plaintiffs were not "learned professionals," and will prevail in case. Lead counsel for PricewaterhouseCoopers, Norman Hile of Orrick, Herrington & Sutcliffe LLP did not respond to our request for an interview. We reached out to all the firms; receiving responses from only BDO, who provide the following statement: "We believe that the employee in this case was properly classified as exempt. This case has been stayed pending resolution of the PwC appeal. As is our policy on matters of litigation, BDO does not intend to comment further until this case is resolved." We were also informed that in the BDO case that the class certification was denied by the trial court and the appeal was also denied. In the case of Hood & Strong, LLP, we were referred to their attorney, Jonathan R. Bass of Coblentz, Patch, Duffy & Bass, who we spoke with briefly about his case, Kathleen McFarland v. Hood & Strong LLP. Mr. Bass indicated to us that the lawsuit against his client is only one of four that is being tried in state court and would not necessarily be affected by the ruling in Campbell. He further indicated that these lawsuits are something that his client, and most likely all the defendants, did not anticipate, "it is not likely that any of these firms considered the possibility of their employees being treated as anything other than exempt." No other firms listed as defendants responded to our request to comment. Ultimately a decision in Campbell may not be known until 2011 at which point the litigation could actually proceed or be settled. We'll continue to follow these cases as they progress.
- Jason Bramwell
- July 20, 2020
In the About section of his LinkedIn profile, Charlie Simpson simply put down, “Delighted to […]
- Caleb Newquist
- July 23, 2010
Sir Michael Rake, the Chairman of BT Group plc (also the former Chairman of KPMG International) presumably wasn’t happy that the $2.4 billion writedown the British telecom giant had to take this past year. No one likes surprises, especially red, multi-billion dollar ones, and after some careful consideration, Rake asked PwC to clean house:
Sir Michael Rake said that PwC changed its personnel after BT expressed its concerns.
He said: “We have reviewed and strengthened our internal audit [function]. We have had discussions with our external auditors and we asked for changes in their team.
“We did a complete review as to what went wrong and why we took longer than we should have to pick up on this issue.”
There is typically some rotation in audit teams working on big accounts but for the client to demand wholesale change is rare. BT had also considered dropping the firm.
SO! Rather than give PwC the heave-ho, cooler heads seem to have prevailed. Since Rake is is a former Klynveldian, that option is out (he left in ’07) and since the FTSE 100 loves the Big 4, that only leaves two options.
Rather than go slumming with E&Y, Deloitte or – God forbid – Grant Thornton or BDO, BT will stick it out with P. Dubs. BUT a knight doesn’t have to like it.
- Adrienne Gonzalez
- January 31, 2011
PwC UK Chairman Ian Powell would like to see more women around the office (obviously he hasn’t been to the San Francisco digs lately) but is taking this new stance slow. As in really slow.
As is, 14% of PwC’s partners are women. 14%! Trailblazers that they are, Powell has decided a target of something like 20% will be reasonable to start. Obviously something is driving the ladies away, however, as P-Dubs takes on over 400 new women a year of the 1000 new grads they hire. What’s wrong, girls, not the dream career you daydreamed it would be in college? “We take on over a thousand graduates a year and the number of women is in the high forties in terms of percentage,” Powell said.
Powell is not suggesting positive discrimination, in which women are treated like the fragile little things they are and given all sorts of breaks like months off to pop out kids, flexible work schedules to allow for time with their progeny and equal pay despite these many concessions.
While the UK considers quotas to force the profession to hire on (or is that keep) more women, Powell insists it is not just a numbers game. Funny, we thought 20% was a number? “There is a lot of debate about quotas but we don’t think that is the way forward. This is not just a numbers game.”
This begs the obvious question: if we’re pushing for “diversity” and making a huge deal out of this, aren’t we ignoring more important qualities such as skill, quality of work and talent by focusing on things like sex and race just to appear to be diverse? If a man, woman, and black transsexual all have the exact same educational background and skill, I’m totally OK with a company going for the most diverse option but we all know there is no such thing as equality. Interviewees come from all backgrounds and bring a variety of talents to the table – that is what firms need to be looking for, not high heels and African ancestors. Equality means being given equal opportunity to thrive and grow, not special favors just because one happens to lack a Y chromosome.
PricewaterhouseCoopers targets women [Telegraph]