United States District Court, S.D. New York
OPINION AND ORDER
LORNA G. SCHOFIELD, District Judge.
Plaintiffs Donna Kassman, Linda O'Donnell, Sparkle Patterson, Jeanette Potter and Ashwini Vasudeva, on behalf of themselves and others similarly situated, bring this action against Defendant KPMG LLP alleging various forms of employment discrimination, including individual and Rule 23 class claims for violations of Title VII; individual and collective action claims for violations of the Fair Labor Standards Act ("FLSA") as amended by the Equal Pay Act ("EPA"); individual and class claims for violations of the New York State Human Rights Law ("NYSHRL"), the New York City Human Rights Law ("NYCHRL") and the New York Equal Pay Law ("NYEPL"); individual claims for violations of the Family and Medical Leave Act ("FMLA"); and an individual claim for a violation of 42 U.S.C. § 1981.
Before the Court are two motions: (1) Plaintiffs' Motion for Conditional Certification and Authorization of Notice ("Motion for Conditional Certification"), and (2) Defendants' Rule 12(b)(1) Motion to Dismiss Plaintiffs' Rule 23 Class Claims in the Third Amended Complaint for Lack of Constitutional Standing ("Motion to Dismiss"). For the reasons discussed below, Plaintiffs' Motion to Certify is granted, and Defendant's Motion to Dismiss is granted in part and denied in part.
A. Procedural Background
Kassman filed her original Complaint in this action on June 2, 2011, and her Amended Complaint on June 6, 2011. On September 29, 2011, Kassman filed her Second Amended Complaint, which also named O'Donnell, Patterson, Potter and Vasudeva as Plaintiffs. Plaintiffs filed their Third Amended Complaint on January 6, 2012.
On February 3, 2012, KPMG filed a Motion to Dismiss Certain Claims and Strike Class Claims as Contained in the Third Amended Complaint. One of Defendant's arguments, relying on Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011), was that Plaintiffs lacked standing to pursue injunctive relief under Rule 23(b)(2) because they were no longer employed by KPMG. Judge Jesse Furman issued an Opinion and Order on February 7, 2013 ("Judge Furman's Opinion"), which left the majority of Plaintiffs' individual and class claims intact. Judge Furman held that the Rule 23 class claims survived because Plaintiffs sought reinstatement at KPMG.
On May 13, 2013, Plaintiffs filed a Motion for Equitable Tolling of the Statute of Limitations for Absent Collective Action Members' Claims under the Equal Pay Act. At a hearing on August 1, 2013, the Court denied the motion without prejudice to renewal by future opt-in Plaintiffs. The Court explained that it would allow discovery and notice to be issued as if the motion had been granted.
B. Facts Relevant to the Motions Before the Court
This opinion assumes familiarity with the basic facts of this case, which are detailed in Judge Furman's Opinion. See Kassman v. KPMG LLP, 925 F.Supp.2d 453, 457-59 (S.D.N.Y. 2013).
i. Motion for Conditional Certification
The facts are taken from the parties' submissions in connection with Plaintiffs' Motion for Conditional Certification.
Defendant KPMG employs over 23, 000 people in over 80 offices. KPMG divides its operations into Audit, Tax and Advisory functions, which are then further divided into specialized areas. The proposed collective consists of women employed in KPMG's Tax and Advisory functions in the positions of Associate, Senior Associate, Manager, Senior Manager/Director and Managing Director, which includes more than 7, 000 women.
As evidenced by KPMG's Career Snapshots and Job Descriptions, employees with the same job title have substantially similar responsibilities and qualifications. These descriptions do not include every task an employee might perform, however, and state that additional qualifications may be required for specific specializations. KPMG's website states that the firm "aim[s] to make it easy for [its employees] to move around at KPMG - geographically, as well as between different job functions."
KPMG's Compensation Guidelines evince that compensation policies are set at high levels and applied across job titles, function groups and geographic locations. For example, KPMG has a firm-wide policy for awarding merit-based increases in compensation. Also, KPMG has a policy providing that compensation must be based on the firm's study of the market rate for each position in each geographic location. Additionally, KPMG has firm-wide salary bands, which establish uniform compensation ranges.
Specific pay amounts are not dictated by these policies, but are determined by the partners in each of KPMG's offices based on factors specific to location and employee. Compensation is reduced for those employees on reduced schedules. Partners can set compensation outside the suggested ranges for a legitimate business reason. Nonetheless, firm policy provides that all employee compensation is ultimately decided by persons at the highest level of firm leadership, who "review compensation recommendations, " make "revisions" and "notify [lower level leadership] when all salary and compensation planning has been approved."
Named Plaintiffs Kassman, Patterson, O'Donnell and Vasudeva were employed by KPMG as client service professionals in the Advisory and Tax practices. Plaintiffs allege that Defendant paid them and similarly-situated female employees less than their male counterparts for performing substantially equivalent work.
Kassman was employed by KPMG in the New York metro area for over seventeen years. She started as a Tax Associate (known then as a Tax Specialist) and was promoted to Tax Senior Manager. Kassman received positive performance reviews from KPMG. Nevertheless, KPMG paid Kassman nearly $50, 000 less per year than comparator John Montgomery, even though Kassman held a law degree and Montgomery did not. KPMG reduced Kassman's salary by $20, 000 per year while she was on maternity leave, but did not reduce any male comparator's pay during this time. When Kassman asked her superior about her pay cut, he told her that she should consider her past salary a loan and that she did not need the money because she had "a nice engagement ring."
Patterson was employed by KPMG in its Atlanta, Georgia office as a Tax Associate for approximately four years. Patterson received positive performance reviews and received a "Standing Ovation" award twice, which KPMG gives to employees who go "above and beyond" in their work. Patterson performed the same tasks as a Senior Associate, although she was never officially promoted. KPMG paid Patterson significantly less per year than male comparator Stephan Rabbitt, even though Patterson held a CPA certification and Rabbitt did not.
O'Donnell was employed by KMPG at one of its international offices and at its Atlanta, Georgia office, where she was a Senior Associate in the Advisory function. O'Donnell was demoted upon her transfer to Atlanta, even though transferred male employees were not demoted. O'Donnell performed Manager-level tasks, but was never officially promoted. KPMG paid O'Donnell approximately $20, 000 less per year than male comparator Krupal Mehta.
Vasudeva was employed by KPMG in its Mountain View, California office as an Advisory Associate and Senior Associate for approximately five years. KPMG paid Vasudeva significantly less than male comparators Ryan Wood-Taylor and Bryan Dillon.
Plaintiffs' preliminary expert analysis shows that nationwide pay disparities at KPMG attributable to gender are statistically significant at more than eleven standard deviations, meaning that the probability that KPMG's compensation could be gender neutral is less than one in one hundred million. This analysis shows that, controlling for gender-neutral variables, KPMG paid female employees in the Tax and Advisory practice groups, from 2008 through 2013, approximately 3% less than their male counterparts for doing equivalent work.
ii. Motion to Dismiss
The facts are taken from the parties' submissions in connection with Defendant's Motion to Dismiss and, as required on this motion, viewed in the light most favorable to the non-moving party.
The Third Amended Complaint lists reinstatement in its Prayer for Relief. However, during her deposition on November 4, 2013, in response to the question: "But you're not seeking to ...