Campbell v. PriceWaterhouse Coopers, LLP

Filing 557

ORDER signed by Judge Lawrence K. Karlton on 11/28/12 ORDERING that 515 the motion to decertify the class is DENIED. (Kastilahn, A)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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JASON CAMPBELL and
SARAH SOBEK, individually,
and on behalf of all other
similarly situated current
and former employees of
PricewaterhouseCoopers, LLP,,
NO. CIV. S-06-2376 LKK/GGH

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Plaintiffs,
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v.
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PRICEWATERHOUSECOOPERS, LLP,
a Limited Liability Partnership;,
and DOES 1-100, inclusive,

O R D E R

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Defendant.
/

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Defendant moves to de-certify the plaintiff class.

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reasons set forth below, the motion will be denied.

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I.

For the

INTRODUCTION

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This is a class action brought by Attest Junior Associates

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employed in the California offices of PricewaterhouseCoopers LLC

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(“PwC”) in California.1

Jurisdiction is based upon class action

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1

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The plaintiffs are variously referred to as “junior
accountants,” “associate accountants,” “associates” and “Attest
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diversity, 28 U.S.C. § 1332(d)(2)(A). The Second Amended Complaint

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alleges that PwC violated California wage and hour laws by, among

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other things, failing to pay required overtime to plaintiffs.

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California law:

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provides that a California employee is entitled to
overtime pay for work in excess of eight hours in one
workday or 40 hours in one week.

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Harris v. Superior Court, 53 Cal.4th 170, 177-78 (2011), citing

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Cal. Labor Code § 510(a).

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Plaintiffs allege, and defendant disputes, that PwC improperly

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classified plaintiffs as “exempt” employees under California labor

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laws.

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other things, avoid paying plaintiffs overtime wages for overtime

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work.

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pay requirement, “administrative, and professional employees” whose

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primary duties meet the test of the exemption, and who regularly

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exercise “discretion and independent judgment” in performing those

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duties.2

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515(a).

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This classification, if correct, would allow PwC to, among

As relevant here, California Law exempts from the overtime

Harris, 53 Cal.4th at 178, citing Cal. Labor Code §

On March 25, 2008, this court certified the following class
of plaintiffs:
All persons employed by PricewaterhouseCoopers, LLP in
California, from October 27, 2002, until the time when
class notice was given, who: (1) assisted certified
public
accountants
in
the
practice
of
public
accountancy, as provided for in California Business and

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Associates.”
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The law also exempts “executive” employees.
defendant no longer asserts that exemption.
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However,

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Professions Code §§ 5051 and 5053; (2) worked as
Associates in the “Attest” Division of the “Assurance”
Line of Service (hereinafter, “Attest Associates”); (3)
were not licensed by the State of California as
certified public accountants during some or all of this
time period; and (4) were classified as “exempt”
employees.

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See Campbell v. PricewaterhouseCoopers, LLP, 253 F.R.D. 586, 590

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(E.D. Cal. 2008) (Karlton, J.).3

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review the order on interlocutory appeal.

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3

The Ninth Circuit declined to

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On March 11, 2009, this court granted plaintiffs a summary

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adjudication on their assertion that Attest Associates could not

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qualify for the “professional” employee exemption because they were

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unlicensed.

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Supp.2d 1163 (E.D. Cal. 2009) (Karlton, J.).

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reversed, holding that even unlicensed accountants could qualify

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for the “professional” employee exemption if they fit within the

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“learned profession” part of that exemption.

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PricewaterhouseCoopers, LLP, 642 F.3d 820 (9th Cir. 2011).

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See Campbell v. PricewaterhouseCoopers, LLP, 602 F.
The Ninth Circuit

See Campbell v.

On this motion, defendant argues that decertification is now
required by subsequent events and by intervening authority.

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Employees of the “Tax” Line of Service, and of the “Systems
Process Assurance” and “Transaction Services” Divisions within the
Assurance line were excluded from the requested class, because
plaintiffs, who were Attest Associates, could not demonstrate
“typicality” with those other employees under Rule 23(a).
Campbell, 253 F.R.D. at 594, 604. Senior Associates in the Attest
Division were excluded from the requested class because plaintiffs
could not demonstrate that common questions of law or fact would
“predominate” over any question affecting only individual members,
under Rule 23(b)(3). Id., 253 F.R.D. at 596 & 604. The Senior
Associates seek class certification in a separate lawsuit. See
Kress v. PricewaterhouseCoopers, LLP, Civ. No. 8:08-cv-965-LKK-GGH
(E.D. Cal.).
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Plaintiffs oppose, asserting that the certification motion was

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correctly decided, and should stand.

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II.

STANDARDS

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A.

Class Decertification - Allocation of Burdens.

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A class certification order “may be altered or amended before

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final judgment.”

Fed. R. Civ. P. 23(c)(1)(C).

Of course,

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plaintiff, as the party seeking class certification, had the

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initial burden “of affirmatively demonstrating that the class meets

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the requirements of Federal Rule of Civil Procedure 23.”

Mazza v.

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American Honda Motor Co., Inc., 666 F.3d 581, 588 (9th Cir. 2012);

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United Steel Workers v. ConocoPhillips Co., 593 F.3d 802, 807 (9th

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Cir. 2010) (“The party seeking class certification bears the burden

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of demonstrating that the requirements of Rules 23(a) and (b) are

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met”).
According

15

to

the

normal

practice

followed

in

regard

to

16

motions, the proponent of a motion bears the initial burden of

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showing that the motion should be granted.

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of a motion to decertify a class, the Ninth Circuit rule is that

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the party resisting the motion bears the burden of showing that the

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motion should not be granted.

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Inc., 639 F.3d 942, 947 (9th Cir. 2011). The resisting party meets

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this burden by showing that class certification is still warranted:

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Thus, as to the class-decertification issue, Marlo, as
“[t]he party seeking class certification [,] bears the
burden of demonstrating that the requirements of Rules
23(a) and (b) are met.”

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Marlo v. United Parcel Service,

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However, in the case

////
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Id., 639 F.3d at 947.4

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B.

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Class certification is proper, and therefore may withstand a

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motion to decertify, only “if the trial court is satisfied, after

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a rigorous analysis, that the prerequisites of Rule 23(a) have been

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satisfied.” General Telephone Co. of Southwest v. Falcon, 457 U.S.

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147, 161 (1982).

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Class Decertification - Rule 23(a).

The Federal Rules provide:

One or more members of a class may sue or be sued as
representative parties on behalf of all members only if:
(1) the class is so numerous that joinder of all members
is impracticable [“numerosity”];(2) there are questions
of law or fact common to the class [“commonality”]; (3)
the claims or defenses of the representative parties are
typical of the claims or defenses of the class
[“typicality”]; and (4) the representative parties will
fairly and adequately protect the interests of the class
[“adequacy” (of representation)].

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Fed. R. Civ. P. 23(a).
14
In the present context – a lawsuit alleging mis-classification
15
of employees as exempt under California law – plaintiffs bear the
16
burden of showing that the mis-classification “‘was the rule rather
17
than the exception.’”

Marlo, 639 F.3d at 947, quoting Marlo v.

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United Parcel Service, Inc., 251 F.R.D. 476, 482 (C.D. Cal. 2008).
19
C.

Class Decertification - Rule 23(b).

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In addition, class certification is proper only if “at least
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one of the requirements of Rule 23(b)” is satisfied.

Ellis v.

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Costco Wholesale Corp., 657 F.3d 970, 979-80 (9th Cir. 2011). That
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Quoting United Steel Workers, 593 F.3d at 807, which holds
that the proponent of the motion to certify the class bears the
burden of proof.
Of course, this court is bound by the Ninth
Circuit rule.
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rule provides:

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A class action may be maintained if Rule 23(a) is
satisfied and if: ... [1] the court finds that the
questions of law or fact common to class members
predominate over any questions affecting only individual
members, and [2] that a class action is superior to
other available methods for fairly and efficiently
adjudicating the controversy.

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Fed. R. Civ. P. 23(b)(3).

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The court must be satisfied that the party that bears the

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burden has “affirmatively demonstrate[d]” that “there are in fact

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sufficiently numerous parties, common questions of law or fact,
Wal-Mart Stores, Inc. v. Dukes, 564 U.S.

, 131 S. Ct.

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etc.”

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2541, 2551-52 (2011). The Rule 23(b)(3) predominance inquiry asks

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whether the proposed classes “are sufficiently cohesive to warrant

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adjudication by representation.

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between the common and individual issues.”

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Home

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Litigation), 571 F.3d 953, 957 (9th Cir. 2009) (citations and

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internal quotation marks omitted).5

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III. ANALYSIS - RULE 23(a)

Mortgage

(In

re

Wells

The focus is on the relationship

Fargo

Home

Mevorah v. Wells Fargo
Mortg.

Overtime

Pay

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A.

Numerosity.

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This court has previously found that plaintiffs have satisfied

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the

numerosity

requirement.

Campbell,

253

F.R.D.

at

594.

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Defendant does not challenge that finding and it is re-affirmed

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here.

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5

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Quoting Local Joint Executive Bd. of Culinary/Bartender
Trust Fund v. Las Vegas Sands, Inc., 244 F.3d 1152, 1162 (9th
Cir.), cert. denied, 534 U.S. 973 (2001), and Hanlon v. Chrysler
Corp., 150 F.3d 1011, 1022 (9th Cir. 1998).
6

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B.

Commonality.

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To establish commonality, plaintiffs must establish “that

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there are one or more questions of law or fact common to the

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class.”

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It is sufficient that there be one common question “apt to drive

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the resolution of the litigation.”

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(“We quite agree that for purposes of Rule 23(a)(2) even a single

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[common] question will do”) (internal quotation marks omitted):

Ellis, 657 F.3d at 980, citing Fed. R. Civ. P. 23(a)(2).

Wal-Mart, 131 S. Ct. at 2556

What matters to class certification ... is not the
raising of common “questions” – even in droves – but,
rather the capacity of a classwide proceeding to
generate common answers apt to drive the resolution of
the litigation.
Dissimilarities within the proposed
class are what have the potential to impede the
generation of common answers.

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Wal-Mart, 131 S. Ct. at 2551.6

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that plaintiffs have satisfied the commonality requirement.

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Campbell, 253 F.R.D. at 594-95.

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on

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authority have undermined it. However, plaintiffs have once again

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met their initial burden to show the existence of common questions,

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and nothing in defendant’s submissions refutes that showing.7

the

grounds

1.

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that

This court has previously found

Defendant challenges the finding

subsequent

events

and

intervening

legal

Common Contentions – Discretion and Independent
Judgment.

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Among defendant’s affirmative defenses in this case is that
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plaintiffs were properly classified as “exempt” from the overtime
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Quoting Nagareda, Class Certification in the
Aggregate Proof, 84 N.Y.U.L. Rev. 97, 131–132 (2009).
7

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Defendant’s
discussed below.

evidence

goes
7

to

“predominance,”

Age

of

which

is

1

pay requirements.8 The two exemptions defendant still asserts are:

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the

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employee” exemption. One requirement that both of these exemptions

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have in common is that the employee must regularly and customarily

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use “discretion and independent judgment” in his or her work. Cal.

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Labor Code § 515(a); Cal. Code Regs., tit. 8, § 11040(1)(A)(2)(b)

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(administrative

8

exemption); Campbell, 253 F.R.D. at 599-600.

“learned

9

profession”

exemption;

exemption)

&

and

the

11040(1)(A)(3)(c)

“administrative

(professional

The term discretion and independent judgment “implies
that the person has the authority or power to make an
independent choice, free from immediate direction or
supervision
and
with
respect
to
matters
of
significance.”
Former
29
C.F.R.
§
541.207(a).
“Discretion and independent judgment involves the
comparison and evaluation of possible courses of
conduct, and acting or making a decision after
considering various possibilities.”

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Campbell, 253 F.R.D. at 600, quoting Nordquist v. McGraw-Hill
15
Broadcasting Co., 32 Cal. App.4th 555, 564 (5th Dist. 1995); see
16
also,

2002

Update

of

The

DLSE

Enforcement

Policies

and

17
Interpretations Manual (Revised) (“2002 Revised DLSE Manual”) ¶
18
53.3.8, & 53.3.8.1 (same).9
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To meet their initial burden on this decertification motion,
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8

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The court notes that under California law, “exemptions from
statutory mandatory overtime provisions are narrowly construed.”
Ramirez v. Yosemite Water Co., Inc., 20 Cal.4th 785, 794 (1999).
9

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The interpretations of the California Department of Labor
Standards & Enforcement (“DLSE”) are not binding on this court, but
they are helpful where, as here, they appear to carry out the
intent of the law. See Harris, 53 Cal.4th at 190 (“Although we
generally give DLSE opinion letters ‘consideration and respect,’
it is ultimately the judiciary's role to construe the language”).
8

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plaintiffs must show that there is common proof that will determine

2

the

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discretion and independent judgment in their work:

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common

question

of

whether

Attest

Associates

exercise

To show that an exemption policy resulted in widespread
misclassification, there has to be some common proof
that allows a fact-finder to make a class-wide
determination.... The need for common proof recognizes
that a plaintiff's evidence should have some common
application to class members in order to provide a basis
for the jury to find that “misclassification was the
rule rather than the exception ...."

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9
10

Marlo, 251 F.R.D. at 484.
Plaintiffs have met their initial burden.

They have made a

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legal and factual showing tending to refute the claim that the

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Attest

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discretion and independent judgment. For example, plaintiffs have

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directed the court’s attention to the deposition testimony of PwC’s

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30(b)(6) witness, Debbie McBee (Kershaw Decl. Exh. 5, ECF No. 556-1

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at pp. 67-88), which indicates that an internal audit manual gives

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specific instructions on how Associates are to assist in the audit,

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what specific types of testing should be done, how the testing

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should be done, and what internal control framework should be

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followed.

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Associates,

are

allowed

to,

or

in

fact

do,

exercise

Plaintiffs have also presented evidence that not only is

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everything

the

Associates

do

reviewed,

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Associates cannot make a move without first submitting it for the

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independent judgment of a supervisor.

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Associate has completed a “step” in an audit, nothing happens with

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regard to that step until a supervisor has reviewed all the
9

but

in

essence,

the

For example, even after an

1

documentation going into the step and then made his or her own

2

judgment to approve it.

3

Exh. 24, ECF No. 556-8, pp. 24-34).

4

Common Contentions – Learned Profession.10

2.

5

The

See Depo. of Ashlee Pierce (Kershaw Decl.

first

exemption

defendant

claims

is

the

“learned

6

profession” exemption.

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defendant will have to show that an Attest Associate is a person

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primarily engaged in:

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To prevail on the merits of this defense,

Work requiring knowledge of an advanced type in a field
[of] science or learning customarily acquired by a
prolonged course of specialized intellectual instruction
and study ...; [and]

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Who customarily and regularly exercises discretion and
independent judgment ....

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Cal. Code Regs., tit. 8 § 11040(1)(A)(3)(b).

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As a threshold showing on the merits, defendant will have to

15

show

that

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customarily

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intellectual instruction.”

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1081

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instruction must be “sufficiently specialized” and “relate directly

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to the position.”

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‘customarily

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intellectual instruction’ restricts the exemption to professions

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where specialized academic training is a standard prerequisite for

(9th

the

Attest

acquired

Cir.

position
by

2011).

a

“requires

prolonged

To

by

course

of

knowledge

specialized

Solis v. Washington, 656 F.3d 1079,
qualify

Id., at 1088-89.

acquired

advanced

a

prolonged

for

the

exemption,

the

Indeed, “[t]he phrase
course

of

specialized

24
25
26

10

One common contention – whether a professional license is
required for this exemption – has been resolved in the negative by
the Ninth Circuit. See Campbell, 642 F.3d 820.
10

1

Id., at 1084 (emphases added).11

entrance into the profession.”

2

It is apparent, then, that this exemption presents a common

3

question: does acceptance into the Attest position require, as a

4

standard prerequisite, advanced knowledge customarily acquired by

5

a prolonged course of specialized academic instruction? It is also

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apparent on its face that this exemption is susceptible to common

7

proof.

8

resumes of Attest Associates.

9

whether or not Associates have the supposedly required academic

One simple example of common proof here would be the
That evidence would tend to show

10

training.

Another example of common proof is the testimony of

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hiring

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credentials are a standard prerequisite for the hiring of an Attest

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Associate.

managers

to

establish

whether

or

not

the

academic

14

Plaintiffs have in fact, directed the court’s attention to the

15

declaration of Paul F. White (ECF No. 262), submitted by defendant

16

in

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declaration contains several tables purporting to show the academic

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credentials of Attest Associates. The chart (Exh. F), shows a wide

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variety of degree types awarded to the class members.

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mostly Bachelor’s, Master’s and MBA degrees, and most of the

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degrees are in Business and International Business, Economics,

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Accounting and Public Accounting, Management, Finance, Commerce,

support

of

its

earlier

summary

judgment

motion.

That

There are

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24
11

25
26

Both parties appear to accept the federal law and
regulations, and the Ninth Circuit interpretation thereof, as at
least providing relevant guidance to this court in construing the
state law and regulations.
11

1

Statistics and Business Administration.

2

a

3

addition, some of the degrees are in Systems Technology, General

4

Education, Physical Education, General Coursework, Information and

5

Computer

6

Applications

7

“Radio, TV, and Film,” English, “Science and Technique Japanese,”

8

Computer Applications, Zoology, Women’s Studies and Info Systems

9

Management.

“CAAP”

certificate,

Science,
and

and

several

“None,”

Associate’s

History,

Mathematics,

However, there are also

Mass

Microbiology,

Degrees.

In

Communications,
General

Studies,

10

Plaintiffs have also offered the testimony of defendant’s own

11

Rule 30(b)(6) witness, Kathleen Harada (Kershaw Decl. Exh. 1, ECF

12

No. 556-1, pp. 1-16), on this point.

13

although “it’s preferred” for an applicant to have an accounting

14

degree or to “show that you’ve taken the accounting courses” needed

15

to sit for the CPA exam, nevertheless “[y]ou could be considered”

16

for the position even if the applicant lacked the educational

17

requirements needed to sit for the CPA exam.

18

pp. 9-10.)

19

Plaintiffs

have

thus

met

Ms. Harada testified that

their

(Harada Decl. ECF

initial

burden

for

20

decertification purposes, that they can present common proof that

21

the prolonged study requirement is not a standard prerequisite for

22

the job of Attest Associate, and therefore that Associates are not

23

covered by the “learned profession” exemption.

24

shown that there is common proof that defendant has cast its

25

employment net wide enough to accept as Associates, people without

26

“specialized” academic training.
12

Plaintiffs have

See Solis, 656 F.3d at 1088 (“An

1

educational requirement that may be satisfied by degrees in fields

2

as diverse as anthropology, education, criminal justice, and

3

gerontology does not call for a “course of specialized intellectual

4

instruction”).

5

3.

6

Common Contentions – The Administrative Exemption.

Defendant next asserts that plaintiffs are exempt because they

7

are “administrative” employees.

8

establishing that they can present common proof on this exemption.

9

The exemption applies to an employee:

10

Plaintiffs bear the burden of

(a) ... [w]hose duties and responsibilities involve ...
[t]he performance of office ... work directly related to
management policies or general business operations of
his/her employer or his employer's customers; and

11
12

(b) Who customarily and regularly exercises discretion
and independent judgment; and ...

13
14

(d) Who performs under only general supervision work
along specialized or technical lines requiring special
training, experience, or knowledge; ... and

15
16

(f) Who is primarily engaged in duties that meet the
test of the exemption.

17
18

Cal. Code Regs., tit. 8, § 11040(1)(A)(2).

19

Accordingly,

common

contentions

that

plainly

present

20

themselves are: (1) do the Attest Associates perform work directly

21

related to the management policies or general operations of PwC or

22

its

23

discretion and independent judgment; (3) do they work under only

24

general supervision; and (4) are they primarily engaged in exempt

25

work?

26

clients;

(2)

do

they

customarily

and

regularly

exercise

As discussed above, plaintiffs have met their initial burden
13

1

of

showing

the

existence

of

a

common

contention

regarding

2

“discretion and independent judgment.” Accordingly, they have met

3

their initial burden regarding this exemption.

4

C.

Typicality and Adequacy

5

Defendant argues that the named plaintiffs are not “typical”

6

of the class nor “adequate” representatives because they were not

7

good employees.

8

substandard performers, received poor performance reviews and had

9

limited audit experience.

Defendant asserts that the named plaintiffs were

Motion To Decertify at 47 (ECF p.55).

10

However, the named plaintiffs satisfy the typicality requirement

11

not because they were model employees, but because they present the

12

same common questions as are presented by the other class members.

13

For example, they present the common issues of whether their work

14

involved the exercise of discretion and independent judgment, and

15

whether they had to be “learned professionals” before they could

16

be hired as Associates.

17

found, they are adequate representatives because there is no

18

conflict of interest between the named plaintiffs and the class,

19

and counsel has ample experience in these types of cases.

20

court re-affirms the findings of typicality and adequacy.

21

IV.

In addition, as the court has already

The

ANALYSIS - RULE 23(b)(3)

22

A.

Predominance.

23

Defendant has again submitted a small mountain of declarations

24

to show that the individual issues will predominate over common

25

issues.

26

////
14

1

1.

Learned Profession.

2

The common contention here, as discussed above, is whether a

3

“prolonged course of specialized intellectual instruction and

4

study” is a standard prerequisite for the position of Attest

5

Associate.

6

Defendant argues that individual issues predominate because

7

the court must determine how the Associates’ educations were

8

“customarily acquired.”

9

But that is not what the court must determine.

Motion To Decertify at p.37 (ECF p.45).
The learned

10

profession exemption does not ask where or how Attest Associates

11

acquired their educations.

12

Attest Associate – is one which customarily requires a prolonged

13

course of specialized intellectual instruction and study.

14

it is enough to determine whether or not PwC requires such an

15

educational background of its potential hires.

16

simple matter of common proof.

17

with its hiring policies.

18

with whatever evidence they think shows that PwC did not require

19

such an education prior to hire.

It asks whether their occupation –

Thus,

This should be a

PwC can submit resumes, together

Plaintiffs can submit resumes, along

20

Defendant also argues that the threshold inquiry here is a

21

“fact-specific” inquiry into what work each Associate does, citing

22

the Ninth Circuit’s summary judgment decision in Campbell, 642 F.3d

23

at 827.

24

Because each Associate’s work must be examined, defendant argues,

25

there can be no common proof.

26

says or implies that an examination of the individual work of every

Motion To Decertify (ECF No. 515-1) p.37 (ECF p.45).

Nothing in the decision, however,

15

1

single Associate is a “threshold” requirement for certification of

2

the class.

3

Defendant further argues that the Ninth Circuit did not really

4

mean it when it held that the “prolonged course of specialized

5

intellectual instruction,” was a “standard prerequisite” for the

6

“learned profession” exemption.

7

defendant attempts to defuse the “standard prerequisite” language

8

by noting that it occurs only in a “singular reference.”

9

defendant does not explain the significance of its appearing only
in

the

11

prerequisite” phrase apart, and attempts to define one part of it

12

–

13

defendant,

14

“standard” to mean “typical” or “usual,” and therefore a standard

15

prerequisite does not refer to an actual requirement.

16

does not however, define “prerequisite,” thus presenting only one-

17

half of an argument.

the

essentially
Merriam

defendant

out

Webster

of

takes

the

However,

once

–

Next,

First,

10

“standard”

decision.

Solis, 656 F.3d at 1084.

existence.

Dictionary

“standard

According

in

1983

to

defined

Defendant

18

In fact, the Ninth Circuit’s use of the term “standard

19

prerequisite” is entirely consistent with its overall decision in

20

the

21

requirement that must be established before the court can find that

22

an employee is exempt under the learned profession exemption.12

case

–

the

prolonged

study

requirement

is

a

threshold

23
24
25
26

12

In addition, the Ninth Circuit has, in other contexts, used
“standard prerequisites” to refer to actual requirements, not
simply typical or usual ones. See Syverson v. IBM Corp., 472 F.3d
1072, 1078-79 (9th Cir. 2007) (listing the “standard prerequisites”
for “the application of offensive nonmutual issue preclusion”).
16

1

Nothing in Solis indicates that the court meant by “standard

2

prerequisite” anything other than a requirement that must be met

3

before qualifying for the position.

4

2.

Discretion and Independent Judgment.

5

This court previously found that the mere fact that Associates

6

were supervised might not be sufficient to establish that the

7

“administrative” employee exemption did not apply.

8

looking at the actual work done by Associates, the court found that

9

the

10

work

was

sufficiently

similar

that

common

However,

issues

would

predominate.

11

Plaintiff has again met its initial burden to show that common

12

issues predominate here. In response, defendant has submitted many

13

declarations purporting to show how different the actual work is

14

that Associates do.

15

variety of work by Associates. However, in the key area of whether

16

that work involves the exercise of discretion and independent

17

judgment, defendant has failed to show that individual issues will

18

predominate.

In fact, the declarations do show a wide

19

Nothing in the varied work descriptions or seniority levels

20

described in the declarations leads to the conclusion that some

21

Associates

22

judgment, while others do not.13 To the contrary, the declarations

customarily

exercise

discretion

and

independent

23
13

24
25
26

The Declaration of Andrea Ekstrom (ECF No. 517-10 /
Thomasch Decl., Exh. T25) presents one exception. Ekstrom was
hired by PwC as a Senior Associate and gave a Declaration in her
capacity as a Senior Manager. Her Declaration asserts that in one
case, an Associate under her supervision determined which documents
were needed from a client, and obtained those documents from the
17

1

show that even when an Associate is working as the “in-charge” on

2

an engagement, his or her discretion and independent judgment, if

3

any, is cabined by the same level of close supervision.14

4

Defendant argues that an Attest Associate who reviews the work

5

of

6

Associates, is necessarily exercising discretion and independent

7

judgment.

Defendant then produced evidence that several Attest

8

Associates

engaged

9

Associates.

other

Attest

Associates,

in

or

reviewing

who

or

supervises

supervising

other

other

Attest

Attest

However, exemption does not blindly follow a label,

10

as PwC itself argues.

Thus, merely stating that an Associate

11

engages in “supervising” interns, other employees, or even other

12

Associates, does not end the inquiry.

13

an Associate “completed” a review for another employee.

14

the rare declarations that do specify what is actually involved in

15

these reviews make clear that they are simply recommendations that

16

are brought to a supervisor who then makes the independent judgment

17

about how to proceed.15

Nor does the assertion that
In fact,

18
19
20
21

client without getting authorization from Ekstrom. However, a
review of the submitted declarations from Attest Associates
themselves does not show this level of independence. Thus, even
accepting the Ekstrom Declaration at face value, it fails to show
that this level of independence was customary for Associates.
14

22
23
24

For example, the Declaration of Laura Anderson (ECF No.
517-2 / Thomasch Decl., Exh. T17), shows that although
Anderson was the “in-charge” on an engagement, all of her work
was brought to her supervisor for the supervisor to make the
independent judgment about how to proceed.
15

25
26

For example, the Declaration of Birgit Borgett (ECF No.
517-4 / Thomasch Decl., Exh T19), shows that the Associate “incharge” performed a “first level of review” of the work of a more
junior Associate on the engagement. Borgett Decl. ¶ 13. The
18

1

B.

Superiority.

2

The court has previously determined that class adjudication

3

is the superior method of proceeding here.

4

a class action would be unmanageable because of the alleged

5

predominance of individual issues.

6

that individual issues will not predominate, and according re-

7

affirms its prior finding on superiority.16

8

V.

9

Defendant argues that

The court has already found

ANALYSIS - INTERVENING AUTHORITY
A.

Vinole v. Countrywide Home Loans, Inc.

10

In Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935 (9th

11

Cir. 2009), the Ninth Circuit affirmed the district court’s denial

12

of class certification for a proposed class of employees classified

13

as

14

California’s overtime wage requirements.

15

would be error to “adopt a rule that class certification is

16

warranted under Rule 23(b)(3) whenever an employer uniformly

17

classifies a group of employees as exempt, notwithstanding the

“outside

sales

employees,”

and

therefore

exempt

from

Vinole holds that it

18
19
20

reviewed Associate’s work was then subject to another level of
review by a more senior person. Id.
16

21
22
23
24
25
26

In addition, defendant asserts that there is no common
question in the claims that it denied meal periods and rest breaks.
The common question is: whether class members were illegally denied
meal periods and rest breaks. The lawfulness of the practice of
course, depends on the common questions applicable to the
exemptions, as discussed above. There are no individual issues
here. The claim here is not that the employees did not take the
breaks – which would present individual issues – but that they were
not “provided” to the class members. See Brinker Restaurant Corp.
v. Superior Court, 53 Cal.4th 1004, 1018 (2012) (“State law
obligates employers to afford their nonexempt employees meal
periods and rest periods during the workday”).
19

1

requirement that the district court conduct an individualized

2

analysis of each employee's actual work activity.”

3

at 946 (“[w]e decline to adopt such an approach because ... we hold

4

that a district court abuses its discretion in relying on an

5

internal uniform exemption policy to the near exclusion of other

6

factors relevant to the predominance inquiry”).

7

Id., 571 F.3d

This holding is entirely consistent with this court’s 2008

8

certification decision.

In that decision, this court expressly

9

acknowledged the teaching of the California Supreme Court, on the

10

merits of the exemptions, that “‘the court should consider, first

11

and foremost, how the employee actually spends his or her time.’”

12

Campbell, 253 F.R.D. at 600, quoting Ramirez, 20 Cal.4th at 802.

13

Although Ramirez was opining on how the merits of the exemption

14

should be determined, the requirement of examining how the employee

15

actually spends his or her time spills over into the class question

16

as well.

17

examining the “small mountain” of declarations submitted by PwC,

18

this court found that the job duties among Attest Associates was

19

sufficiently similar to warrant class treatment.

And that is exactly what this court did.17

After

Id., 253 F.R.D.

20
21
22
23
24
25
26

17

Defendant does not specifically state what holding or
principle of Vinole undermines this court’s prior decision on class
certification. The court therefore infers that it has correctly
guessed PwC’s intention, since it is the major holding of Vinole
applicable to this case, and it is also the principle discussed at
the citation provided by PwC in its main brief urging
decertification. See Motion To Decertify at p.25 (ECF p.33). In
its Reply, PwC simply includes Vinole in a footnoted string cite
for the proposition that there have been “watershed developments”
since the certification order was issued. See PwC Reply (ECF No.
529) at p.1 n.2 (ECF 8 n.2).
20

1

at 604-05.

However, this factual examination also convinced this

2

court that the job duties of Senior Associates were sufficiently

3

diverse that they should be excluded from the class encompassing

4

junior Associates.

Id., at 605.

5

B.

6

Mevorah v. Wells Fargo Home Mortgage (In re Wells Fargo Home

7

Mortg. Overtime Pay Litigation), 571 F.3d 953 (9th Cir. 2009), is

8

a companion case to Vinole.

9

presumption that class certification is proper when an employer's

In re Wells Fargo Home Mortg. Overtime Pay Litigation.

10

internal

11

employees.”

12

acknowledges:

13

exemption

It also rejects any rule creating “a

policies

are

applied

Id., 571 F.3d at 958.

uniformly

to

the

However, Wells Fargo also

Of course, uniform corporate policies will often bear
heavily on questions of predominance and superiority.
Indeed, courts have long found that comprehensive
uniform
policies
detailing
the
job
duties
and
responsibilities of employees carry great weight for
certification purposes.

14
15
16
17

Id.
Here again, this court can discern nothing in the Ninth

18
19

Circuit

decision

that

undermines

this

court’s

previous

20

certification decision.

21

teaches that this court should apply the principle that it did

22

apply in the certification decision – it is necessary to focus on

23

the actual jobs done by employees, and not exclusively focus on the

24

label attached to their jobs, or the employer’s policies regarding

25

their work.

26

////

To the contrary, this case, like Vinole,

21

1

C.

Marlo v. United Parcel Service, Inc.

2

In Marlo v. United Parcel Service, Inc., 639 F.3d 942 (9th

3

Cir.

4

supervisors (“FTS”) as “executive and administrative” employees,

5

and thus exempt from the mandatory overtime pay requirements of

6

California’s labor laws.

7

were mis-classified, and the district court certified a class, with

8

Marlo as their representative.

9

class, finding that the plaintiff had not established predominance,

10

and that he “has not come forward with common proof sufficient to

11

allow a fact-finder to make a class-wide judgment” as to the

12

supervisor positions previously certified.

13

2011),

the

employer

had

classified

certain

full

time

Plaintiff alleged that the supervisors

Later, the court decertified the

Id., 639 F.3d at 945.

The Ninth Circuit affirmed the decertification of the class.

14

The court first affirmed the district court holding that plaintiff

15

bore the burden of proof on defendant’s motion to decertify.

16

639 F.3d at 947.

17

finding that plaintiff had not met his burden to show predominance

18

“as to these particular exemptions.”

19

not provide evidence on whether the supervisors were “primarily

20

engaged” in exempt activities, or whether they customarily and

21

regularly exercised discretion and independent judgment. Id., 639

22

F.3d at 945.

23

In

the

Id.,

The Court then affirmed the district court

district

court,

the

For example, plaintiff did

critical

issue

was

whether

24

plaintiffs could present “common proof of misclassification.”

25

Marlo v. United Parcel Service, 251 F.R.D. 476, 480 (C.D. Cal.

26

2008) (Pregerson, J.).

That court was careful to avoid weighing
22

1

the evidence “or otherwise evaluat[ing] the merits of a plaintiff’s

2

class claim.” Id., 251 F.R.D. at 481 n.2, citing Eisen v. Carlisle

3

& Jacquelin, 417 U.S. 156, 178 (1974). But it also recognized that

4

“this principle does not prevent a court from comparing the class

5

claims, the type of evidence necessary to support a class-wide

6

finding on those claims, and the bearing of those considerations

7

on Rule 23 certification.”

8

nothing

9

certification decision.

10

1.

in

this

Ninth

Id.

Circuit

Once again, the court discerns
decision

that

undermines

its

Use of “Policies and Procedures.”

11

Marlo rejects, as did Wells Fargo and Vinole before it, the

12

idea that the class proponents can rely on the employer’s “policies

13

and procedures” to establish sufficient evidence of predominance.

14

Marlo, 639 F.3d at 948.

15

and procedures, but rather examined the factual bases for the class

16

proponent’s claim of predominance, as discussed above.
2.

17
18

This court did not rely on PwC’s policies

Week-by-Week Examination
Employee
is
“Primarily
Activities.

to Determine
Engaged”
in

Whether
Exempt

19

As PwC points out, Marlo states that the district court did

20

not err “in requiring a week-by-week determination of exempt

21

status.”

22

court is required to conduct a week-by-week analysis of the job

23

duties of each and every PwC Attest Associate, and therefore, class

24

treatment makes no sense.

25
26

Marlo, 639 F.3d at 948.

PwC argues from this, that this

PwC’s argument attempts to prove much too much.

First, the

fact that the district court in Marlo “did not err” does not mean
23

1

that a week-by-week analysis is required in every case.

2

event, what the district court “did not err” in was in requiring

3

plaintiffs to address the “primarily engaged” requirement: “Equally

4

important,

5

addresses the ‘primarily engaged’ element of the exemption, and

6

specifically the week-by-week aspect of the analysis.” Marlo, 251

7

F.R.D. at 486.

8

explicit week-by-week analysis beyond a showing of “common proof.”

9

The court was explicit about this:

there

is

no

indication

that

Plaintiff's

In any

evidence

Nothing in the district court decision required an

The Court does not suggest that a showing of the amount
of time each individual spends on exempt versus
nonexempt work is necessarily required to maintain a
class action. A plaintiff could present common proof on
this issue.

10
11
12
13

Id.

14

affirm the district court’s requirement of “common proof” to meet

15

the week-by-week analysis, not that individual proof of every

16

employee, every week was required.

17

Accordingly, the Ninth Circuit language must be understood to

This court’s certification decision accepted the common proof

18

offered by both sides.

19

declarations indicated that whether an Attest Associate was engaged

20

in exempt work depended upon which work-week the court examined.

21

To the contrary, the declarations showed the commonality of the

22

work, and gave no indication that this commonality would be

23

dissolved if viewed on a week-by-week basis.

24

Second,

PwC’s

Nothing in PwC’s little mountain of

position

is

too

sweeping

an

argument.

25

Notwithstanding all the common questions and common proof that

26

could be offered, and that were offered in this case, it is always
24

1

the case that an employee’s work could be examined on a week-by-

2

week basis. If that is all that is required to defeat a class, PwC

3

would have found the magic bullet that would eliminate most class

4

actions in the wage and hour context.

5

Marlo, nor any other pronouncement of the Ninth Circuit, or the

6

Supreme Court, so broadly.

This court does not read

7

D.

Campbell v. PricewaterhouseCoopers, LLP (9th Cir.).

8

On March 11, 2009, this court granted plaintiffs’ motion for

9

summary adjudication, finding that they were ineligible for the

10

“professional” exemption. That provision of California regulations

11

exempted

12

professions,”

13

PricewaterhouseCoopers, LLP, 602 F. Supp.2d 1163 (E.D. Cal. 2009)

14

(Karlton, J.).

15

holding that even though plaintiffs were not exempted by the

16

“licensed” accountants provision, they could still be exempted

17

under the “learned profession” provision.

18

833

19

inapplicable to unlicensed accounts as a matter of law”); accord,

20

Zelasko-Barrett v. Brayton-Purcell, LLP, 198 Cal. App.4th 582, 588

21

(1st Dist. 2011) (same).

(the

“licensed”

accountants,

whether

licensed

and

members

or

not.

of

“learned

Campbell

v.

On June 15, 2011, the Ninth Circuit reversed,

“professional”

exemption

Campbell, 642 F.3d at

is

not

“categorically

22

The Ninth Circuit further determined that fact questions

23

precluded summary judgment on whether the “learned profession”

24

exemption

25

plaintiffs’ “actual job duties and responsibilities” – the “crucial

26

touchstone

applied.

for

the

Specifically,

professional
25

the

Court

exemption”

–

found

was

that

subject

the

to

1

“myriad” and “voluminous” conflicting evidence:

2

6

The parties dispute everything from what Attest
associates actually do during audit engagements to
whether PwC can reasonably expect unlicensed junior
accountants to perform anything more than menial,
routinized work. The wide array of evidence from both
parties includes depositions from class members and
other PwC employees, internal PwC manuals explaining job
roles and procedures for audit engagements, and detailed
training documents for PwC's auditing software.

7

Campbell, 642 F.3d at 830. Finally, the Court determined that only

8

the fact-finder could “weigh this voluminous conflicting evidence

9

and

3
4
5

10
11

determine

whether

Plaintiffs

professional exemption.”

meet

the

standards

of

the

Id.

Thus, the Ninth Circuit decision in Campbell did not address

12

class certification.

13

law, plaintiffs were not categorically excluded from the “learned

14

profession”

15

professional license; and (2) material issues existed with respect

16

to the “learned profession” exemption which precluded a summary

17

adjudication on the merits.

18

PwC

exemption

argues

that

Rather, it was a decision that: (1) on the

solely

the

by

Ninth

virtue

of

Circuit

their

decision

lack

in

of

a

Campbell

19

undermined what it seems to think was this court’s view that a job

20

title could determine exemption status.

21

at p.38 (ECF p.46) (“Having the Job Title of Attest Associate

22

Cannot Resolve the Applicability of the Professional Exemption”).

23

It also argues that this court was mistaken on placing the focus

24

“on whether the individual is employed in a qualifying occupation,”

25

since Marlo makes clear that the focus is on “an employee’s ‘actual

26

job duties, not the employee’s job title or professional field.’”
26

See Motion To Decertify

1
2

Motion at p.38 (ECF p.46).
The Ninth Circuit decision does not undermine this court’s

3

language relating to class certification.

4

cited by PwC as now hopelessly incorrect, referred to a phrase that

5

came out of the governing regulation: “But the test considers

6

whether an employee is ‘primarily engaged in an occupation commonly

7

recognized as learned.’”

8

added), quoting Cal. Code Regs., tit. 8 § 11040(1)(A)(3)(b).18

9

Notwithstanding

the

This court’s language,

Campbell, 253 F.R.D. at at 598 (emphasis

shifting

focus

in

the

language

of

the

10

regulation from the “employee,” to the “position” or to the

11

“occupation,” this court’s certification order focused not on the

12

title, but the work performed, as required by Marlo.

13

E.

Wal-Mart v. Dukes.

14

In Wal-Mart Stores, Inc. V. Dukes, 564 U.S. ___, 131 S. Ct.

15

2541 (2011), plaintiffs alleged that pay and promotion decisions

16

at Wal–Mart were generally committed to local managers' broad

17

discretion, and that that discretion was exercised “‘in a largely

18

subjective

19

discretion,

20

disproportionately in favor of male employees, leading to an

21

unlawful disparate impact on the female employees. Since Wal-Mart

manner.’”
according

Wal-Mart,
to

131

S.

Ct.

plaintiffs,

at
was

2547.

This

exercised

22
23
24
25
26

18

The “position” versus “employee” issue is clouded by
language that can be found throughout the cases and regulations
that mix up those terms. See, e.g., Cal. Code Regs., tit. 8, §
11040(1)(A)(3) (focuses on “occupation”); Id. § 11040(1)(A)(3)(b)
(focuses on “employee” engaged in the performance of described
work); 29 C.F.R. § 541.301(a) (focuses on “employee’s” primary
duty) (federal regs are incorporated into the Wage Order).
27

1

was aware of this, its failure to correct the situation amounted

2

to disparate treatment in violation of Title VII, plaintiffs

3

alleged.

4

The case turned on “commonality.”

Wal-Mart, 131 S. Ct. at

5

1550 (“[t]he crux of this case is commonality”).

6

turn, “requires the plaintiff to demonstrate that the class members

7

‘have suffered the same injury.’”

8

The claims of the class members “must depend upon a common

9

contention.”

Id.

Commonality, in

Wal-Mart, 131 S. Ct. at 2551.19

It is a “common contention” if “determination

10

of its truth or falsity will resolve an issue that is central to

11

the validity of each one of the claims in one stroke.”

12

Court Majority was unable to grasp any common contentions.

13

was no common policy involved, it found, other than the policy to

14

grant

15

contention.20

discretion

to

local

managers,

and

therefore

Id.

no

The
There

common

16

It is not clear to this court what is the basis for PwC’s

17

assertion that the record, viewed in light of Wal-Mart, “makes

18

clear that Plaintiffs’ claims and PwC’s defenses cannot possibly

19

be tried on a class-wide basis.”

20

p.19).

21

“have not identified a common mode of exercising discretion that

Motion To Decertify at p.11 (ECF

In Wal-Mart, commonality was not shown because plaintiffs

22
23
24

19

Quoting General Telephone Co. of Southwest v. Falcon, 457
U.S. 147, 157 (1982).
20

25
26

The Court also rejected plaintiffs’ assertion that the
back-pay claims were appropriate for a Rule 23(b)(2) class. That
appears to have no relevance to this lawsuit, which involves a Rule
23(b)(3) class.
28

1

pervades the entire company.”

Wal-Mart, 131 S. Ct. at 2554-55.

2

This court’s certification decision was consistent with Wal-

3

Mart. It found that plaintiffs had identified common contentions,

4

including

5

independent judgment.

6

of generating common answers.

7

presented thus far permits this court to determine “in one stroke”

8

whether the Associates have done so.

9

whether

whether

the

Attest

Associates

exercised

discretion

and

Moreover, the common questions are capable

Associates

are

As shown above, the evidence

Other common questions are

performing

work

described

in

the

10

regulation defining the “learned profession” exemption, and whether

11

they possess the required academic learning to qualify for that

12

exemption.

13

VI.

14
15

CONCLUSION
For the foregoing reasons, the motion to decertify the class

is DENIED.

16

IT IS SO ORDERED.

17

DATED:

November 28, 2012.

18
19
20
21
22
23
24
25
26
29