PricewaterhouseCoopers Headed For A Trial In California Overtime CaseBy Francine • Jun 17th, 2011 • Category: Audit Firm Management, PricewaterhouseCoopers, Pure Content, Regulators, Laws, Standards, Regulations, The Case Against The Auditors, Your Career
I wrote yesterday in Forbes on the decision by the Ninth Circuit Court of Appeals in California regarding the PricewaterhouseCoopers Attest (Audit) Associates overtime case.
It’s a complicated case and it’s not over yet.
It’s also another case, like Satyam, that I’ve followed for a while – almost as long as I’ve been writing this blog.
Here’s an excerpt from the first article I wrote about it in October of 2007. The case started in 2006.
With echoes of pending actions against E&Y and KPMG in Canada, PwC has now been served in the first Big 4 suit to make it to the class certification stage, according to the firm representing the plaintiffs, Kershaw, Cutter & Ratinoff…According to CFO.com, “…under California law, only certified public accountants can properly be classified as exempt from receiving overtime.”
“For years, the Big 4 accounting firms have ignored Federal and State laws mandating the payment of overtime to unlicensed accountants,” said Bill Kershaw, the KCR attorney representing the plaintiffs. “This is in stark contrast to smaller accounting firms, many of whom comply with California’s overtime law and pay overtime to their unlicensed associates as non-exempt employees.”
In June of 2008, I wrote about it again:
Take a look at this response to one of the most important points of fact in the complaint and tell me what you think is wrong with this picture..
“Answering paragraph 4 of the Complaint, PwC admits Plaintiffs are individuals and residents of the State of California. PwC further admits that Plaintiffs were employed by PwC as “associates”in PwC’s Assurance Line of Service. PwC is without knowledge or information sufficient to form a belief as to the truth of the allegations concerning Plaintiffs credentials or degrees, licensing status by a state or federal agency, test status or “Certified Public Accountant” or “CPA” designation from the State of California, and on that basis denies such allegations. PwC admits Plaintiffs bring this action as a proposed class action on behalf of themselves and certain current and former California employees of PwC. Except as so admitted, PwC denies each and every allegation ofthis paragraph in the complaint. “
Hey Jude Curtis, PwC Chief Ethics, Risk and Compliance Officer: Shouldn’t you guys know who is licensed in each state, each and every state where your professionals work and travel, and whether a particular person has proper credentials and degrees to be an auditor?
Lawsuits are tedious. They take forever. Judges often reverse each other. It’s almost never over when you think because there’s almost always an opportunity for an appeal. Those who think an injustice has been done often only give up when they run out of money or die.
The latest twist in this case was a reversal by the Ninth Circuit Court of Appeals of a lower court decision that handed a partial summary judgement to the plaintiffs – more than 2000 PwC attest associates in California who claim they are owed overtime under California law.
Yesterday, the Ninth Circuit Court of Appeals decided that the lower court had erred in granting partial summary judgment because it misconstrued the statute. The lower court erred by finding that all of the enumerated professions, including accountants, were precluded as a matter of law from presenting evidence that their employees could meet the professional and administrative exemption requirements.
From yesterday’s decision:
PwC has viable defenses under the professional exemption and the administrative exemption. Neither exemption is categorically inapplicable to unlicensed accountants as a matter of law, and PwC has established material fact questions on whether Plaintiffs fall under either exemption. The exemption defenses must be resolved at trial.
The case is now headed to trial unless something happens before that. There’s one thing about litigation that everyone agrees on. Anything can, and sometimes does, happen.
Read the rest in Forbes.