PricewaterhouseCoopers has settled the class action lawsuit about not paying overtime to non-licensed accountants. More details and humongous amounts of whining in the comments can be found at Going Concern: PwC Settling California Wage & Hour Lawsuit for $5 Million
A few tidbits from the settlement, as motivation for you to do everything you can to avoid litigation:
- $5.0M – total settlement
- $2.0M – attorney fees
- $0.925M – costs and expenses reimbursed to plaintiff’s attorneys
- $2.075M – payout to the class
I have no idea how many members of the class there may be. I’ll make an uneducated wild guess the average payout will be in the range of a few thousand dollars.
Attorneys spent 11,500 hours over 8 years on the litigation. That is an average of about 1,400 hours per year.
Their payout is an average of $174 per hour.
With my minimal knowledge of civil cases, I’ll guess that PwC incurred an equal amount, around $3M, defending the case.
Look at the spread, based on my wild guesses and rounding:
- $8M – rough guess of cost to PwC
- $2M – payout to members of class
- $6M – cut that went to attorneys on both sides for their time and cost
- 25% – portion of gross cost that goes to claimants
Lessons to be learned:
- Don’t do things that will get you into a class action defense.
- If you are a defendant, settle early.
- If you are a plaintiff, settle early.
Question for you to consider:
Who made a killing on this?
In December 2014, Francine McKenna discussed the case: Ignoring High Reputation Risk, PricewaterhouseCoopers Fights California Overtime Class Action. She mentioned there are 1,944 class members.
Here are some more calculations, on an average basis:
- $4,115 – gross cost, on average, to PwC
- $2,572 – settlement per person
- $1,067 – average amount to be received per member of the class
Eight years of litigation for an average of a grand a piece.