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Ex-Deloitte Workers Win Cert. Bid In OT Case

Law360 - Ben James

A New York federal judge on Friday granted conditional collective action certification to two ex-Deloitte & Touche LLP workers who claim Deloitte ran afoul of federal law by failing to pay low-level auditing employees overtime.

U.S. District Judge Richard M. Berman granted the plaintiffs' Aug.15 motion for conditional class certification in an 11-page order, concluding that named plaintiffs Dina Gersten and Jason James had made the “modest factual showing” necessary to warrant conditional certification.

Gersten filed suit in April alleging that Deloitte failed top pay overtime to nonlicensed audit assistants, audit senior assistants, audits-in-charge and audit seniors when they worked more than 40 hours in a given week. James filed a similar suit, and the cases were consolidated in November.

The plaintiffs and those like them were misclassified as exempt from the Fair Labor Standards Act's overtime pay requirements, they said.

“We are very pleased with Judge Berman's ruling,” Outten & Golden LLP's Justin M. Swartz, an attorney for the collective group, said Monday. “It will allow thousands of workers across the country to find out about this case and decide whether they want to protect their rights. These types of workers were exploited by Deloitte and other accounting firms.”

At least for conditional certification purposes, the order said, the plaintiffs have adequately demonstrated that they and other “audit class members” were similarly situated with respect to job requirements and pay provisions, and that they were classified as exempt under a common Deloitte policy or scheme.

The plaintiffs submitted pleadings, affidavits and other evidence showing that they and other collective group members were similarly situated in their job requirements because, among other things, they performed nonexempt clerical work to assist certified public accountants with audits, and they each received training on completing an audit using Deloitte's audit methodology and procedures, Judge Berman pointed out.

“Plaintiffs have also shown that audit class members are similarly situated in their inability to exercise independent judgment and discretion with respect to matters of significance,” the order said.

All tasks the class members perform are subject to multiple levels of detailed review, the order said, citing declarations filed by the plaintiffs. Furthermore, the plaintiffs' memorandum supporting the conditional certification bid said that accountant licensing laws and professional rules limit the class members to assisting Deloitte CPAs in providing public accountancy services, Judge Berman pointed out.

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In addition to the FLSA allegations, New York Labor Law claims are in play in the case as well. Swartz said he expected to seek class action certification on the case's NYLL component in the coming months.

Judge Berman's order directed the plaintiffs and Deloitte to engage in good faith settlement negotiations ahead of a Feb. 16 conference.

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The Nov. 22 consolidation order designated Outten & Golden's Swartz and Max Folkenflik of Folkenflik & McGerity as co-lead counsel for the plaintiffs.

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The case is Dina Gersten and Jason James v. Deloitte & Touche LLP and Deloitte LLP, case number 1:11-cv-02461, in the U.S. District Court for the Southern District of New York.