PricewaterhouseCoopers LLP (PwC) has agreed to pay nearly $12 million to a group of unsuccessful job applicants to resolve a suit in California federal court accusing the accounting firm of age discrimination. The named Plaintiffs Steve Rabin and John Chapman asked U.S. District Judge Jon S. Tigar for preliminary approval of a settlement in which PwC agreed to pay $11.6 million to resolve claims that it violated the Age Discrimination in Employment Act (ADEA) by systematically favoring younger applicants and denying older candidates jobs that they were qualified to perform.
Judge Tigar had conditionally certified the collective action last year. The parties estimated there will be some 5,000 individuals in the class. Around 3,500 individuals have opted into the suit so far, according to the motion. In addition to the monetary payout, PwC also agreed to revamp its hiring procedures to better recruit older workers for low-level jobs and limit the potential for age bias to creep into the process. The applicants said in the motion:
The [$11.6 million] common fund plus the programmatic relief constitutes fair, reasonable, and adequate compensation for the class members, in light of potential value of their claims.
The suit was filed in 2016 accusing PwC of flouting the ADEA as well as several state anti-discrimination laws. Rabin, a certified public accountant, alleged he was denied a job as a seasonal experienced associate in 2013 when he was 50 years old. He also claimed PwC had a “stunningly low” number of older workers in entry-level and lower- to mid-level positions. Rabin also claimed that PwC “rarely” advertised entry-level openings publicly, that it mostly hired entry-level accountants through campus recruiters and that people who aren’t affiliated with a college can’t apply for those entry-level positions. Chapman later joined the suit as a named Plaintiff asserting claims under Michigan state law.
PwC’s argument in a motion for judgment on the pleadings that the ADEA doesn’t permit job applicants to bring disparate impact claims was rejected by Judge Tigar. He wrote at the time that a textual analysis of the U.S. Supreme Court’s precedents in Griggs v. Duke Power Co. and Smith v. City of Jackson, along with the Equal Employment Opportunity Commission’s interpretation of the ADEA and the act’s legislative history, confirms that job applicants such as the Plaintiffs may bring disparate impact claims. Judge Tigar said:
Rather than invent a new and more restrictive interpretation of Section 4(a)(2), this court will follow the guidance of Smith and Griggs. Those precedents support extending the right to make a disparate impact claim under the ADEA to ‘any individual’ who has been adversely affected ‘because of such individual’s age,’ regardless of whether she is an applicant or employee.
The proposed settlement would cover a collective under the ADEA as well as classes brought under both California and Michigan state laws.
Additionally, the procedural changes PwC agreed to make over a two-year period include bringing aboard a neutral consultant who will conduct age inclusivity training for company leadership and employees who are part of the hiring process. The consultant would also offer ways to recruit workers older than 40 for positions specified in the settlement. PwC also agreed to advertise job openings directly to older applicants and include age as a protected category under the company’s nondiscrimination policy.
Rabin and Chapman would each stand to receive $20,000 service awards as part of the agreement. The nonmonetary elements of the settlement make the agreement true value millions higher than the amount in the settlement fund, according to the motion.
Jahan Sagafi of Outten & Golden LLP, who represented the Plaintiffs along with lawyers from the AARP, told Law360:
discriminatory obstacles in recruiting, hiring and retention are unfair and they contribute to America’s unemployment problem. We [at] Outten & Golden, together with our co-counsel AARP Foundation, are committed to remedying age discrimination in hiring, which can lock qualified, energetic older workers out of job opportunities.
The applicants are represented by Jahan Sagafi, Laura Mattes, Adam Klein, Melissa Stewart, Daniel Stromberg and Lucy Bansal of Outten & Golden LLP, Daniel Kohrman, Laurie McCann and Dara Smith of AARP Foundation Litigation and Jennifer L. Liu of The Liu Law Firm PC. The case is Steve Rabin et al. v. PricewaterhouseCoopers LLP, (case number 3:16-cv-02276) in the U.S. District Court for the Northern District of California.
This story appears in the April 2020 issue of The Jere Beasley Report. For more like this, visit the Report online and subscribe.