Class of 2,000 PwC Audit Associates Wins $5 Million Overtime Settlement After Eight-Year Fight

PricewaterhouseCoopers, one of the largest accounting firms in the world, hired thousands of entry-level college graduates each year to staff its California audit practice. Those associates, who lacked CPA licenses, worked long hours reviewing client financial records. PwC classified them as exempt professionals, meaning they received no overtime pay under California law regardless of how many hours beyond eight in a day they put in.

Jason Campbell and Sarah Sobek filed suit in the Eastern District of California in 2006, arguing that the professional exemption did not apply to unlicensed workers whose duties were largely clerical and supervised. William Kershaw of what was then Kershaw Cutter and Ratinoff took on the representation of the class, which grew to cover roughly 2,000 current and former California audit associates over a class period running from October 2002 through the end of 2014.

The case generated legal interest beyond Sacramento. A federal district judge granted plaintiffs' motion for summary adjudication on the exemption issue, finding the associates were not exempt under California's 2001 wage order. PwC appealed. The Ninth Circuit reversed in March 2011, holding that the professional and administrative exemptions were not categorically inapplicable to unlicensed accountants as a matter of law, and that the question turned on each employee's actual job duties. Forbes contributor Francine McKenna, who covered the Big Four accounting industry closely, reported on the case at multiple stages and named Kershaw as lead plaintiffs' counsel throughout the appellate proceedings.

After the Ninth Circuit sent the case back for further proceedings, Kershaw's team pressed forward. By early 2015 the case was scheduled for trial, with PwC facing the prospect of testimony from its senior executives, including the firm's U.S. chairman and global chairman, about how the associates' work was actually organized and supervised. The reputational exposure of a public trial added pressure on the defense side.

The parties reached a $5 million gross settlement before trial. Court records described counsel as having spent more than 8 years and 11,500 hours working the case. Plaintiffs' attorneys sought $2 million in fees and up to $925,000 in litigation costs, while the two named plaintiffs each requested $15,000 for their participation over the full length of the case. Individual class members received payments calculated on hours worked beyond eight per day and on weeks of employment during the class period, with a minimum floor of $100 per member.