Proposed Settlement Of Age Discrimination Case Hardly Onerous For PricewaterhouseCoopers

PricewaterhouseCoopers (PwC) has agreed to settle a class action lawsuit alleging age discrimination in hiring by paying out $11.625 million, an amount that is not even a blip on the radar screen of a firm that reports annual revenues in excess of $41 billion.

Moreover, PwC seems somewhat tentative with respect to its commitment to change the hiring practices the plaintiffs have argued since 2016 were grossly discriminatory to older workers.

Both sides released a carefully worded press release earlier this month stating that PwC has agreed “to enhance certain of its recruiting procedures geared toward further attracting qualified older applicants for entry level jobs.”  

PwC will ‘enhance’ … ‘certain’ recruiting procedures.

PwC did not admit to any wrongdoing.

Campus Recruiting

The lawsuit alleged PwC refused to hire older workers for associate jobs by filling staff positions almost exclusively through college campus recruiting that was off-limits to older workers and by failing to post entry-level accountant jobs on its website.

In a 2011 report, PwC boasted the average age of its workforce was 27 and that two out of three PwC employees were in their 20s and early 30s. According to government statistics, the median age of accountants and auditors in the U.S. at the time was about 43 years old.

The lawsuit alleged PwC’s mandatory early retirement policy, which requires partners to retire by age 60, acts as an incentive for discrimination because older applicants present “less return” on the company’s investment.

Specifically, the proposed settlement requires PwC to:

• Hire an “organizational expert consultant to advise on training on age inclusivity for leadership and employees” for employees involved in training and recruiting;
• Stop asking applicants at the “pre-offer” stage of the hiring process when they graduated from college and/or placing limitations on graduation year or age; and,
• Permit “alumni to apply for on-campus openings.”

There is no mention of PwC’s mandatory retirement policy for partners at age 60.

The $11.625 million goes into what is called a “common fund” that will be used to pay the plaintiffs’ attorney fees and “programmatic relief covering various aspects of PwC’s employment practices, to be maintained during a two-year implementation period.” The amount to be distributed to the 3,500 class members seems destined to be tiny – possibly less than a few thousand each?

The class is limited to applicants age 40 and older who were denied a “covered” PwC position in California or Michigan between September 8, 2013 and January 21, 2020 or who lived in California or Michigan at the time they applied for a “covered” PwC position.

The settlement must be approved by U.S. District Judge Jon S. Tiger of Oakland, California.

No Protection

Attorneys for both sides declined to respond to requests for comment.The plaintiffs found themselves in an unenviable position.

The lawsuit was filed in 2016 under the theory of disparate impact discrimination, which applies to workers in a protected group who are adversely and disproportionately affected by a seemingly neutral employment policy or practice.

The U.S. Court of Appeals for the 11th Circuit based in Atlanta in 2016 and the U.S. Court of Appeals for the Seventh Circuit based in Chicago in 2019 ruled the Age Discrimination in Employment Act of 1967 protects only “employees” and not outside job applicants (like the plaintiffs in the PwC case).

The U.S. Supreme Court declined to address the matter, leaving older workers with no protection under the ADEA from systemic hiring discrimination in Alabama, Florida, Georgia, Illinois and most of Indiana and Wisconsin.

The 11th and 7th Circuit rulings do not apply in California, where the PwC lawsuit was filed, and Judge Tiger rejected an earlier PwC motion to dismiss the case on the grounds the ADEA does not permit disparate impact claims by outside applicants. However, the U.S. Court of Appeals for the Ninth Circuit in San Francisco could ultimately overrule Judge Tiger and leave outside job applicants in California, Arizona, Alaska and Hawaii without protection under the ADEA.

Plaintiff

The complaint was filed by Steve Rabin, a 53-year-old Certified Public Accountant with over ten years of accounting experience who was willing to take an entry level job to get “Big 4” experience that is considered critical to obtaining good jobs in the accounting profession.

At one point, he was interviewed by PwC and asked by a 35-year-old Senior Assurance Manager: “The people in the cubicles are much younger than you. How would you fit in? Would you be able to work for a younger manager or director?” Rabin was not selected and, according to the lawsuit, a younger applicant who was not more qualified was hired.

The plaintiffs are represented by the firm of Outten & Golden and the AARP Foundation Litigation.