Deloitte & Touche 2; Accountants 0

(CN) - A federal judge again denied unlicensed accountants class certification in a yearlong overtime pay lawsuit against Deloitte & Touche in California.

Lead plaintiff James Brady sued the firm in 2008, claiming it misclassified employees of its "audit line of service" as exempt from overtime.

The Northern District of California certified the class in 2010, but the Ninth Circuit stayed the ruling while it considered a similar overtime case against rival PricewaterhouseCoopers.

In Campbell v. Pricewaterhouse Coopers, the Ninth Circuit ruled that unlicensed accountants were ineligible for a professional exemption.

Companies in California must pay overtime to employees who work more than 40 hours a week, unless they meet exemptions for professionals, executives or administrators.

The Ninth Circuit lifted its stay against Deloitte & Touche, and U.S. District Judge Susan Illston granted a motion to decertify the class in 2012, ruling that the plaintiff auditors could not exhibit a common thread among class members.

"The court finds that plaintiffs have not demonstrated that common issues predominate," Illston wrote. "The voluminous and conflicting evidence in the form of class member declarations and deposition testimony shows wide variation in the job duties and work experiences of class member, and plaintiffs have not shown that this inquiry is amenable to common proof."

Illston on Sept. 4 denied a renewed request for class status based on a narrowed definition of Deloitte employees who worked as "audit assistants" or "audit senior assistants."

"After careful consideration of the parties' arguments and the new evidence submitted by plaintiffs, the Court concludes that plaintiffs have not demonstrated that common issues predominate," Illston wrote. She said there was a "wide variation in the job duties and work experiences of class members."

"The Court agrees with plaintiffs that whether Deloitte's requirements for class member positions satisfy the specialized knowledge requirement of the learned professions prong of the professional exemption can be litigated on a class-wide basis," the 3-page ruling states. "However, for the same reasons articulated in the decertification order, plaintiffs have not shown that the balance of the professional exemption analysis is amenable to common proof."

Deloitte claimed the unlicensed accountants were exempt from overtime under professional and administrative exemptions of California Wage Order No. 4-2001.

Illston agreed.

"The evidence before the Court shows that class members are subject to differing degrees of supervision and exercise varying degrees of discretion and independent judgment, factors that are relevant to both exemptions," the ruling states.

Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services, with more than 200,000 professionals in 150 countries.

The SEC in July charged the firm with violating auditor independence rules, because its consulting affiliate maintained a business relationship with a trustee serving on the boards and audit committees of three funds it audited.

Deloitte agreed to pay $1 million to settle the charges.

Deloitte settled a separate overtime class action from information technology support technicians in Manhattan Federal Court for $1.5 million in 2013.

Requests for comment were not immediately returned Wednesday.

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