A tipster wrote us earlier today: FYI, the wage settlement checks arrived. […] All of these years of waiting has led to me being paid pennies on the dollar… Yet again PwC finds a way to stick it to me. And we've seen the check! We agreed to not publish it to protect our tipster's […]
We’ve been following Campbell v. PricewaterhouseCoopers for a long time so it’s kinda sad to see it come to a whimpering end.
The last update on Campbell v PricewaterhouseCoopers we had for you was back in May of last year, when the trial date was predictably changed (again), pushing the festivities off until March of this year. Well, we're happy to tell you we have a little news. It seems both sides were able to "work things […]
We're sure you have been anxiously awaiting news on Campbell v PricewaterhouseCoopers and boy are we thrilled to give you some. No, the parties haven't settled. No, the original judge did not resign due to a scandal involving a PwC intern mistress (he retired, actually). And no, Jason Campbell hasn't been wacked mafia-style to make […]
We received an item of great importance to some of you in the tip box, those of you impacted by this news out of PwC should already be aware of it but everyone else, read on: The Office of General CounselPricewaterhouseCoopers LLPMarch 31, 2014 We are writing to inform you of an important legal agreement […]
Few things are as old as Going Concern (can you believe I didn't have any cats when this site was launched in 2009?!), but Campbell v. PricewaterhouseCoopers is one such thing that has dragged on longer than the dysfunctional little relationship we all share around this virtual watercooler. Just look at how un-jaded and enthusiastic […]
Ever since Going Concern was launched in 2009, we've been following Campbell v. PricewaterhouseCoopers, the wage and hour lawsuit brought by audit associates in California. It's one of many suits floating around in the legal system but Campbell has slowly progressed through the courts, including arguments before the 9th Circuit Court of Appeals on whether PwC could […]
It's been awhile since we've written anything on Campbell v. PricewaterhouseCoopers but this announcement from the plaintiffs' attorneys seemed worthy of sharing with you all: On March 1, 2013, the Ninth Circuit Court of Appeals entered an order denying defendant PricewaterhouseCoopers LLP's petition for an early appeal of the District Court's order denying class decertification. […]
Last month, the PCAOB released its 2011 inspection report for PwC. With a 41% deficiency rate for the 60 audits inspected, it's safe to assume that the firm wishes it could have put up a better number. As we noted at the time, Papa Whiskey Charlie encouraged the PCAOB to step up its game a […]
Wage and hour lawsuits against Big 4 firms have been part of our coverage since the launch of Going Concern. Campbell v. PricewaterhouseCoopers has been big news in California and was the first case we covered. Lately, Pippins v. KPMG has been getting quite a bit of ink, thanks to a very proactive PR campaign by […]
Yesterday we learned that the 9th Circuit Court of Appeals ruled in favor of PwC in the matter of Campbell v. PricewaterhouseCoopers, the wage and hour class-action lawsuit filed in California. It’s a pretty major win for P. Dubs and the decision remands the case back to district court for trial. I was skimming over the 9th Circuit’s Decision in case over at Leagle and found some interesting things that I thought were worth sharing including some details about the named-plaintiff’s performance. The following anecdote seems to support the firm’s argument that unlicensed associates must “exercise discretion and independent judgment” and if they don’t, they will be held responsible:
PwC […] argues Plaintiffs perform analytical work “integral” to PwC’s Attest services. To the extent Plaintiffs do not regularly exercise discretion and independent judgment during an audit engagement, PwC says they are failing to meet the firm’s expectations. PwC emphasizes the variety of duties performed by Plaintiffs during an engagement and claims the failure to perform those tasks adequately can have “significant consequences” for PwC’s clients. During one engagement, for example, named-plaintiff Campbell overlooked approximately $500,000 in the client’s unrecorded liabilities. This oversight, which Campbell himself described as a “serious error,” was ultimately discovered by another team member. The error required a late financial adjustment and made the client unhappy.
While working for PwC, Campbell and Sobek each received some criticism over their job performance. In addition to the mistake described above, Campbell earned a “Less Than Expected” rating during his 2006 annual performance review. Sobek received the same rating during her 2005 review. More generally, PwC alleges both named-plaintiffs consistently fell below the firm’s expectations for Attest associates.
Campbell was terminated by PwC in 2006 for poor performance. Sobek resigned from the firm that same year.
Obviously just because Jason Campbell and Sarah Sobek both had performance ratings of “Less Than Expected” and that Mr. Campbell was fired does not mean that all 2,000 members of the class-action were of similar ratings. Regardless, it’s an interesting little nugget of information that we were not previously aware.
The rest of the opinion is pretty analytical, labor law stuff, so if you’re into that, the whole thing is worth a read, otherwise you can discuss as you wish below.
The 9th U.S. Circuit Court of Appeals reversed [a lower court decision] on Wednesday, ruling that PwC is entitled to litigate whether the unlicensed accountants can be exempted from overtime laws. The 9th Circuit remanded the case back to a district court in Sacramento, Calif. for more proceedings.
So, no this isn’t over. The actual trial still hasn’t gone down but this is definitely a big win for PwC.
A firm spokesperson provided us with the following statement: “PwC is pleased that the Ninth Circuit supported its arguments in this important case. The firm greatly values these employees and considers their work an integral part of PwC’s success.” An attempt to reach counsel for the plaintiffs was not immediately returned. Will keep you updated with any new details as we learn them.
Campbell v. PricewaterhouseCoopers
~ 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.
UPDATE: Audio is now available for those interested. You can listen to the proceedings here.
~ Update includes oral argument date included in third paragraph
~ Update 2 includes correction of the spelling of “Stepan Mekhitarian” under the list of amicus briefs for the plaintiffs.
One of the stories that we’ve covered with interest since the launch of Going Concern has been the wage and hour lawsuits in California. For those needing a refresher, these are suits that were brought by non-licensed associates against various accounting firms (list of cases at bottom of this post) included who believe they were misclassified under California law as exempt professionals and are due overtime and other benefits due to non-exempt empl tle differently, “I worked a ton of hours during busy season and all I got was sleep deprivation, a fat ass and I still don’t have a CPA so, pretty please, I’d like a little more money.”
Every once in awhile we get asked about the status of these cases and since it’s been a
few months almost a year since our last post, we thought we’d update you briefly. You may remember that the main case, Campbell v. PricewaterhouseCoopers, is currently with the 9th Circuit Court of Appeals on interlocutory appeal over the issue of whether “learned professionals” can be defined as an exempt employees.
We recently spoke with a source familiar with the defense’s strategy in this case and learned that the two sides are to give oral arguments before the court
sometime early this year on February 15th, after which, the Court will likely render its decision in the latter part of 2011 (everyone’s hoping, anyway). Regardless of the decision in the 9th Circuit, the case will go back to the trial court, so get comfortable.
While the developments in the case have been slow, it is interesting to note that both sides are both confident in their chances of victory in the 9th Circuit and make no mistake, it’s an important ruling. If the 9th Circuit were to rule in the favor of the plaintiffs, it could very well be a quick resolution, as the plaintiffs’ attorney, Bill Kershaw told us in July 2009, “the likelihood of the case resolving itself prior to trial would substantially increase,” although, our source disagreed with this sentiment, so we’re counting on a battle.
Something else worth noting (that we may have glossed over in prior posts) is that there are suits brought in both state and federal court. The main difference being that at the state level, once a suit is classified as a class-action, individuals are classified as plaintiffs until they opt out while the cases at the federal level are “collective action” where once a particular group of people are identified as plaintiffs, they are given the chance to opt in to participate in the lawsuit. In other words, employees of a firm who are thought to be non-exempt under California law, are automatically members of the class-action in state court while in federal court, potential plaintiffs have to choose to participate voluntarily. This makes the federal cases broader in scope geographically but trials at the state level will have a larger number of members in the class-action, which could mean a larger settlement.
Finally, some additional new information that we have to pass along are the organizations that filed amicus briefs on behalf of both parties. Here are the groups that filed amicus briefs on behalf of both parties; the notables being the U.S. Chamber of Commerce and AICPA for PwC:
Organizations Filing Amicus Briefs in Support of PwC
1. Employers Group, Chamber of Commerce of the United States of America, and California Chamber of Commerce (one brief)
2. American Institute of Certified Public Accountants
3. California Employment Law Council
Organizations Filing Amicus Briefs in Support of Plaintiffs
1. California Employment Lawyers Association
2. Former Commissioner of the California Industrial Welfare Commission (Barry Broad) and Former Chief Counsels of the California Division of Labor Standards Enforcement (Miles Locker and H. Thomas Cadell) (one brief)
3. Brandy Blaske, David Lee, Julia Longnecker,
Stephan Stepan Mekhitarian, and Svetlana V. Murphy (all are Plaintiffs in Mekhitarian, et al. v. Deloitte & Touche, a proposed class action involving D&T’s Tax line of service)
So while it will be some time before we’ll see a ruling in Campbell this year, not to mention a resolution at the trial level, you can bet lots of unlicensed PwC employees will be working plenty of hours this busy season.