Kassman v. KPMG LLP

Background

The plaintiffs, current or former KPMG employees, brought claims under the Equal Pay Act, which prohibits paying employees of one sex less than employees of the other sex for substantially equal work performed under similar working conditions. The case included nine named plaintiffs and 452 former opt-in plaintiffs, or former employees who had joined the case by filing written consents.

The court had previously conditionally certified an Equal Pay Act collective of approximately 1,100 opt-in plaintiffs and later decertified that collective. After decertification, the court established a verified fact sheet process for former opt-in plaintiffs who wanted to continue pursuing their individual claims without filing separate complaints. The court’s order stated that each verified fact sheet would act in all respects as a filed complaint.

KPMG moved under Federal Rule of Civil Procedure 12(b)(6) to dismiss the claims of ten representative former opt-in plaintiffs: Helen Bae, Veronica Driscoll, Rhoda Fukushima, Diana Gioia, Carolann Hernberg, Sarah Huss, Artemis Koch, Barbara Lam, Heidi Nelson, and Elizabeth Silveira Pio. KPMG also moved under Rule 12(f) to strike attorney-prepared addenda attached to the fact sheets and allegations seeking damages that KPMG argued were not recoverable under the Equal Pay Act.

Rule 12(b)(6) standard

The court held that the verified fact sheets were subject to the ordinary pleading standards under Rule 12(b)(6), including the requirement that the alleged facts make liability plausible rather than merely possible. For an Equal Pay Act claim, a plaintiff must allege facts supporting an inference that the employer paid different wages to employees of opposite sexes who performed substantially equal work requiring equal skill, effort, and responsibility under similar working conditions.

The court emphasized that allegations about job titles, classifications, experience, training, education, or ability alone are not enough. A plaintiff must provide facts about the actual job duties or content of the plaintiff’s work and the comparator’s work.

Claims dismissed

The court dismissed the fact-sheet claims of Nelson, Huss, Fukushima, Driscoll, Gioia, Silveira Pio, Bae, and Lam.

Nelson’s and Huss’s fact sheets mainly asserted that they were paid less than men who performed substantially equal work. Their attorney addenda listed possible male comparators, but neither the fact sheets nor the addenda described the job content of the plaintiffs or the comparators. The court held that naming comparators, without facts showing substantially equal work, was insufficient.

Fukushima’s, Driscoll’s, and Gioia’s fact sheets alleged that men with the same job titles or in the same service lines were paid more. The court held that these allegations did not establish that the jobs had substantially equal content because equal-pay claims depend on actual duties, not merely titles or divisions.

Silveira Pio’s and Bae’s allegations concerning faster promotions or promotion discrimination did not state Equal Pay Act claims because promotion discrimination is not actionable under that statute. Bae’s allegations about comparators’ lesser experience, credentials, knowledge, and skills also did not describe the actual job duties sufficiently. Although Bae and Lam alleged that they worked on the same projects or engagements as certain male comparators, the fact sheets did not adequately explain the shared roles, duties, skills, or responsibilities. The court therefore dismissed those claims as well.

The court declined to decide at the pleading stage whether comparators outside a plaintiff’s office satisfied the Equal Pay Act’s “establishment” requirement. It also declined at that stage to limit claims based on alleged willfulness, meaning intentional or reckless conduct relevant to the period for which damages may be available.

Claims not dismissed

The court denied dismissal of Hernberg’s fact-sheet claim. Hernberg alleged that she reviewed tax returns and that male KPMG employees who performed the same work as tax return reviewers were paid more. The court held that these allegations were sufficient at the pleading stage to support an inference of substantially similar work. Hernberg was not required to identify a specific comparator to plead the claim.

The court also denied dismissal of Koch’s claim. Koch identified three male senior managers in the Philadelphia office’s Tax Department and alleged that they performed similar work. She described shared responsibilities including ensuring client-service quality, coordinating projects, managing client relationships and expectations, business development, recruiting, resource allocation, risk decisions, and people-management decisions. The court held that these allegations described actual shared duties with enough specificity to satisfy the pleading standard. Whether differences in the positions ultimately showed that the work was not substantially equal was a factual issue not suitable for resolution on a motion to dismiss.

Motion to strike

The court denied KPMG’s motion to strike. Rule 12(f) allows a court to remove redundant, immaterial, impertinent, or scandalous material from a pleading, but such motions are disfavored.

The court held that comparator lists were relevant to the Equal Pay Act claims and that KPMG had not shown that evidence supporting them could not be admissible. The court also declined to resolve on a motion to strike the legal question whether emotional-distress or psychological-harm damages are recoverable under the Equal Pay Act. KPMG had not shown that the disputed allegations were prejudicial, and the court noted that it had not relied on the disputed material in deciding the dismissal motion.

Disposition

The court’s motion-to-dismiss ruling was granted in part and denied in part. It was denied as to the Hernberg and Koch fact sheets and otherwise granted. The motion to strike was denied. The parties were ordered to meet and confer and file a joint letter proposing next steps by July 29, 2020.