By Mark F. Kluger and William H. Healey
As if PricewaterhouseCoopers, LLP (“PWC”) doesn’t have enough trouble following its Academy Awards debacle, a federal court recently ruled that applicants for entry-level accounting positions at PWC can maintain a class action lawsuit for age discrimination against the accounting giant.
The lawsuit, brought pursuant to the federal Age Discrimination in Employment Act (“ADEA”), alleges that the firm’s recruiting and hiring practices have a disproportionate and illegal impact on qualified workers in the age protected category. ADEA is the federal statute that makes many of us feel old. After all, it considers employees “old,” and therefore worthy of legal protection, beginning at the age of 40. What happened to “40 is the new 30?”
Specifically, the claim, which was brought by a 53 year old CPA who was rejected for a position at PWC, is that by recruiting for entry-level positions on college campuses, PWC, which has 46,000 U.S.-based employees, systematically eliminates from consideration candidates who are older than typical college age students. The Complaint alleges that PWC rarely posts entry-level positions outside of its college recruiting program and does not provide other avenues for candidates to seek those jobs. As a result, the lawsuit asserts that the recruiting policy has a disparate impact on older, qualified accountants.
The legal theory of “disparate impact” discrimination is that an employer’s facially neutral policy can have the unintended effect of disproportionately excluding a protected class from hiring, promotion or raises, or conversely disproportionately including a protected class in reductions in force or pay cuts. In Rabin v. PricewaterhouseCoopers, LLP, the Plaintiff alleges that although he was qualified for an entry-level position at PWC, he and others similarly situated to him (meaning qualified and 40 or older) were denied an opportunity at PWC because he was not a college student or otherwise in a position to be recruited through a college. The claim is that although the policy of recruiting on college campuses, like so many other companies do, is not designed or intended to screen out older workers, it has that discriminatory impact.
It will probably not help PWC’s defense that on its own website it boasts that the average age of its employees is 27, under “Recruiting Process” the first step is “Search for jobs by your school,” and one of the new benefits highlighted is student loan forgiveness. This is especially true because according to the Bureau of Labor Statistics, the average age of a CPA is currently 43 years old. Which is not old, by the way!
The initial legal skirmish won by the Plaintiff against PWC was whether job applicants are even entitled to bring a disparate impact case under ADEA. Although there is a federal appellate court that previously said they are not, which may ultimately impact this case, at least for now, the Plaintiff can proceed. The outcome of the Rabin class action lawsuit, which is being supported by AARP, may have a dramatic impact on employers that recruit on college campuses or engage in other facially neutral hiring practices for entry-level positions that unintentionally block older workers from applying. Stay tuned.