Pippins v. KPMG: FLSA Class Certified and Document Retention Ruling Affirmed

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A New York federal court has conditionally certified a class of audit associates in an action alleging that the accounting firm KPMG violated their rights under the federal Fair Labor Standards Act (FLSA).  See Pippins v. KPMG, No. 11-Civ-0377, 2012 U.S. Dist. LEXIS 949 (S.D. N.Y. Jan. 3, 2012) (available here).  Specifically, the plaintiffs claim that KPMG systematically misclassified its auditors in order to avoid paying them overtime.  Id.

The court found that the auditors established that they were “similarly situated” per the FLSA’s certification requirements by proving that they received the same training, served on similarly structured work teams, performed similar job duties, were subject to the same compensation policies, and worked under tightly circumscribed guidelines applicable to all auditors.  Id. at *3-9.  The court rejected the defendant’s argument that individualized issues predominated, and instead gave credence to the plaintiffs’ allegations and declarations indicating that the same practices and policies apply to auditors across the country.  Id. *3, *28-29. 

Although Rule 23 requirements do not formally apply to FLSA collective actions, the Pippins court noted that “KPMG’s alleged policy of classifying all Audit Associates as exempt is the ‘glue’ that the Supreme Court found lacking in Dukes.”  Id. at *21 (discussing Dukes v. Wal-Mart, 131 S.Ct. 2541 (2011)).  The court also relied on decisions by other courts granting certification of classes of auditors with FLSA claims.  See id. at *29-31 (discussing Kress v. PricewaterhouseCoopers, LLP, 263 F.R.D. 623 (E.D. Cal. 2009)(granting conditional FLSA certification); In re Deloitte & Touche Overtime Litig., No. 11-Civ-2461 (S.D.N.Y. Dec. 16, 2011) (same)).

The Pippins matter is also notable due to a prior ruling by the magistrate judge that required KPMG to preserve electronically stored data during the litigation’s pendency, including prior to the time that conditional certification was granted.  That discovery order was subsequently affirmed by the presiding Article III judge, Hon. Coleen McMahon.  See Pippins v. KPMG, No. 11-Civ-0377 (S.D. N.Y Feb. 3, 2012) (order denying defendant’s objections to the discovery order).