PricewaterhouseCoopers Avoids Age Bias Class Action, for Now (1)

July 26, 2018, 6:16 PMUpdated: July 26, 2018, 9:25 PM

Older applicants who were denied jobs by PricewaterhouseCoopers can’t bring their age discrimination in hiring claims on behalf of a nationwide class, at least for now, a federal judge in San Francisco ruled.

The case is the latest case to challenge the legality of the age-old practice of on-campus recruiting and similar hiring practices—such as “maximum” experience limits for applicants—that target younger workers.

Lead plaintiffs Steve Rabin and John Chapman made the mistake of including in their proposed class job applicants who weren’t qualified for the jobs they sought. Rabin and Chapman also included workers who didn’t actually apply for jobs with PwC because they believed they were deterred from doing so. Rabin and Chapman, however, were both qualified for the jobs they wanted and actually applied for them. That meant the two men weren’t similar enough to the class they sought to represent, the court said. The class proposed by Rabin and Chapman could have boasted as many as 14,000 members.

Rabin and Chapman’s bias allegations include accusations that the accounting giant discriminates against entry-level applicants over age 40 by focusing its recruiting efforts on college campuses and mostly hiring directly from colleges and universities.

Rabin and Chapman say PwC uses a recruitment tool that can only be accessed by those with a current college affiliation. It’s part of the company’s plan to hire predominantly millennial age workers for its assurance and tax business lines and peg all older workers as a “bad fit,” they say. PwC efforts to attract millennials extend to how the firm presents itself on social media and to the types of office events it hosts for workers, including trips to Disney World.

The July 26 ruling by Judge Jon S. Tigar of the U.S. District Court for the Northern District of California, however, is “without prejudice.” Rabin and Chapman have 30 days to file an amended class certification motion to see if they can join forces with other older job seekers across the country who believe PwC turned them away for employment because of their age.

Plaintiffs Will Amend Class Bid

A lawyer for Rabin and Chapman told Bloomberg Law July 26 that they will amend their motion and renew their class certification bid.

Tigar may have suggested a quick way for Rabin and Chapman to at least partly salvage their original proposed class in finding that they aren’t similar enough to rejected applicants who were unqualified to represent their interests in the case. The pair argued that not including unqualified applicants in the class means they’ll be unable to challenge what they see as hiring bias in the process PwC uses to screen job candidates.

“While there may be merit” to that argument, they’ll have to “find another way to challenge discrimination in the initial screen,” perhaps by adding a new named plaintiff to their case, the judge said.

Inadvertent Bias?

While on-campus recruiting isn’t news, the case involves the novel legal question of whether workers 40 and over may sue for unintended age discrimination that occurs during the hiring process. The federal Age Discrimination in Employment Act makes clear that older workers are protected against intentional age bias in hiring and against intentional and unintentional bias after they’ve been hired.

Tigar ruled in February 2017 that PwC must defend against Rabin and Chapman’s allegations of unintentional age bias. But other federal courts have disagreed about whether the ADEA bans hiring policies that inadvertently favor younger workers.

The U.S. Supreme Court recently declined to review whether the 40-plus crowd can sue for hiring bias when there is proof only of inadvertent mistreatment, not intentional unfairness. The justices may ultimately get another opportunity to look at the question depending on how Rabin, Chapman, and the other class members fare on their claims against PwC.

The Bureau of Labor Statistics reports there are nearly 86 million people over 40 in the active labor force—so the answer could affect many workers’ prospects for finding a job in a new field should market shifts or other events make it necessary. While unemployment rates for workers 40 and over generally are lower than for their under-40 counterparts, BLS also reported in 2014 that those 40 and over tend to stay unemployed longer when they lose their jobs.

In addition, another 94 million-plus Americans currently aren’t in the labor force, and 70 percent of those potential workers are 40 or over. Moreover, the BLS reported in May 2017 that the labor force participation rate is expected to increase fastest for people ages 65 to 74, and 75 and older, through 2024 as poor planning or other limitations of retiring are forcing more and more people to work into their later years.

Outten & Golden LLP, Liu Law Firm P.C., and AARP Foundation Litigation represent Rabin and Chapman. Kirkland & Ellis LLP represents PricewaterhouseCoopers.

The case is Rabin v. PricewaterhouseCoopers LLP, N.D. Cal., No. 3:16-cv-02276, motion for conditional class certification denied 7/26/18.

(Updated with additional reporting)

To contact the reporter on this story: Patrick Dorrian in Washington at pdorrian@bloomberglaw.com

To contact the editor responsible for this story: Terence Hyland at thyland@bloomberglaw.com

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