Murphy v. PricewaterhouseCoopers, LLP

• Decision Date: 22 September 2011
• Docket Number: 05–1054 (RJL).,Civil Case. Nos. 02–0982 (RJL)
• Citation: 813 F.Supp.2d 45
• Parties: C. Westbrook MURPHY and Harold Schuler, Plaintiffs, v. PRICEWATERHOUSECOOPERS, LLP, Defendant.
• Court: U.S. District Court — District of Columbia

813 F.Supp.2d 45

C. Westbrook MURPHY and Harold Schuler, Plaintiffs,

v.PRICEWATERHOUSECOOPERS, LLP, Defendant.

Civil Case. Nos. 02–0982 (RJL)

05–1054 (RJL).

United States District Court, District of Columbia.

Sept. 22, 2011.

David Louis Rose, Joshua N. Rose, Rose & Rose, P.C., Richard A. Salzman, Douglas B. Huron, Tammany Morgan Kramer, Heller, Huron, Chertkof, Lerner, Simon & Salzman, PLLC, David M. Wachtel, Bernabei & Wachtel, PLLC, Washington, DC, for Plaintiffs.

Eric M. Nelson, Stephen L. Sheinfeld, Winston & Strawn LLP, New York, NY, Thomas M. Buchanan, Julie A. Klusas Gasper, Winston & Strawn LLP, Washington, DC, for Defendants.

MEMORANDUM OPINION

RICHARD J. LEON, District Judge.

This case is before the Court on cross-motions for summary judgment. Plaintiff Harold Schuler (“Schuler” or “plaintiff”) moves for partial summary judgment on liability, asserting claims under the New York Human Rights Law (“NYHRL”), N.Y. Exec. Law §§ 290 et seq. Pl. Schuler's Mot. for Partial Summ. J. on Liability, Oct. 26, 2010 (“Schuler's Mot. for Partial Summ. J.”) [Dkt. # 235]. In response, defendant PricewaterhouseCoopers, LLP (“PwC” or “defendant”) moves for summary judgment on all remaining claims. Def.'s Mot. for Summ. J. on All Remaining Claims, Oct. 28, 2010 (“Def.'s Mot. for Summ. J.”) [Dkt. # 236]. In addition, plaintiff Schuler and co-plaintiff C. Westbrook Murphy ¹ (“Murphy” or “plaintiff”) seek to amend—through responsive pleadings—their Complaint, initially filed in 2002, to expand claims under the NYHRL and to add parallel claims under the New York City Human Rights Law (“NYCHRL”), N.Y.C. Admin. Code § 8–502. See Pl. Murphy's Opp'n to Summ. J. at (“Murphy Opp'n”) at 5 n.1, Jan. 7, 2011 [Dkt. # 245]; Pl. Schuler's Mem. of Points and Authorities in Opp'n to Def.'s Mot. for Summ. J. on All Remaining Claims (“Schuler Opp'n”) at 6–7, Nov. 23, 2010 [Dkt. # 238].

Upon review of the pleadings, the entire record, and the applicable law, the Court DENIES plaintiff's Motion for Partial Summary Judgment and GRANTS defendant's Motion for Summary Judgment. The Court also DENIES plaintiffs' request to amend their initial Complaint.

BACKGROUND

I. Procedural History

Plaintiff Schuler, a resident of Virginia, began working for PwC's Regulatory Advisory Services (“RAS”) group in 1988. Complaint (“Compl.”), May 20, 2002, ¶ 12 [Dkt. # 1]; see also Def.'s Statement of Undisputed Material Facts (“DSUMF”) ¶¶ 2, 15 [Dkt. # 236]. The RAS group is based in PwC's Washington, D.C., office. Compl. ¶ 12. His co-plaintiff, Murphy, is a resident of Maryland who began working for PwC in 1989.² Compl. ¶ 13; DSUMF ¶¶ 2, 15. This litigation began in 2002 when plaintiffs filed a complaint alleging that, but for age discrimination, they would have been asked to join PwC's partnership in 1999, 2000, and 2001. Compl., ¶¶ 42–51. Plaintiffs alleged violations of the Age Discrimination in Employment Act (“ADEA”), the District of Columbia Human Rights Act (“DCHRA”), and the New York Human Rights Law (“NYHRL”). Id.; see also Schuler v. PricewaterhouseCoopers, LLP, 595 F.3d 370, 373 (D.C.Cir.2010) (“ Schuler II ”) (describing the initial lawsuit).

In 2004, I dismissed as untimely Schuler's 1999 and 2000 claims and Murphy's 1999 claim under the ADEA. Murphy v. PriceWaterhouseCoopers, LLP (Murphy I), 357 F.Supp.2d 230, 240 (D.D.C.2004), aff'd in part, rev'd in part, Schuler II, 595 F.3d at 371.³ In the same Order, I also exercised supplemental jurisdiction over plaintiffs' DCHRA claims and, with respect to plaintiffs' NYHRL claims, concluded that “[f]or a non-resident to assert a claim under this statute, [plaintiffs] must allege that the actual impact of the discriminatory act was felt in New York.” Murphy I, 357 F.Supp.2d at 244–45 (emphasis added) (internal citation omitted). Because plaintiffs had alleged actions instead of actual impact, I dismissed all three (1999, 2000, and 2001) of plaintiffs' NYHRL claims for failure to state a claim upon which relief could be granted. Id. at 244.

In 2008, I granted summary judgment for PwC on plaintiffs' remaining ADEA and DCHRA claims.⁴ With respect to Murphy, I granted summary judgment to PwC on all claims. Murphy v. PricewaterhouseCoopers, LLP, 580 F.Supp.2d 4, 15–16 (D.D.C.2008) ( Murphy 2008 Summ. J. Op.) [Dkt. # 217]. In addition, I granted summary judgment for PwC as to Schuler's ADEA and DCHRA claims for 2001, and dismissed as untimely Schuler's 1999 and 2000 DCHRA claims.⁵ Murphy v. PricewaterhouseCoopers, LLP, 580 F.Supp.2d 16, 25–26, 28 (D.D.C.2008) ( Schuler 2008 Summ. J. Op.) [Dkt. # 219].

In 2010, our Circuit Court affirmed my determination that all of plaintiffs' ADEA and DCHRA claims were either untimely or meritless. It also reversed and remanded the NYHRL-related aspects of my ruling, holding that a claim under the New York statute need not allege in-state impact, but rather “that a discriminatory act occurred in New York.” ⁶ Schuler II, 595 F.3d. at 378 (emphasis added) (internal citation omitted). The panel reasoned that since PwC is headquartered in New York, plaintiffs were “entitled to the reasonable inference” that any alleged discrimination did, indeed, take place there. Id. (quoting Schuler I, 514 F.3d 1365, 1377 (D.C.Cir.2008)). Determining that this inference defeated defendant's motion to dismiss, the Court reversed and remanded the NYHRL claims. Schuler II, 595 F.3d. at 378. These same claims are before me today.

II. FactsA. PwC and Partnership

Over the past nine years, I have made extensive findings of fact in this case and its related cases. See, e.g., Murphy I, 357 F.Supp.2d 230 (D.D.C.2004); Murphy 2008 Summ. J. Op., 580 F.Supp.2d 4 (D.D.C.2008); Schuler 2008 Summ. J. Op., 580 F.Supp.2d 16 (D.D.C.2008); Schuler v. PricewaterhouseCoopers, LLP, 739 F.Supp.2d 1 (D.D.C.2010) ( Schuler III ). Nevertheless, a brief recitation of the salient facts is warranted here. Schuler was born on October 21, 1944, and Murphy was born on January 30, 1940. Compl. ¶ 11. In July 1999—the first time plaintiffs claim they were passed over for promotion—Schuler was 54 and Murphy was 59. At that point, Schuler had worked for PwC for approximately 10 years and Murphy for approximately 11 years. See Compl. ¶¶ 12–13.

As I have described before, “PwC is an accounting and audit firm with over 20,000 employees and more than 2,000 individuals who are partners or principals.” Schuler III, 739 F.Supp.2d at 2 (internal citations omitted). It is “organized and exists pursuant to the PwC Partnership and Principals Agreement (‘the Partnership Agreement’), which provides that ‘[a]n Individual's association with the Firm shall cease at the end of the Fiscal Year in which he or she attains age 60.’ ” Id. That is, PwC's Partnership Agreement requires partners to retire when they turn 60. The Partnership Agreement clarifies that “[t]he term ‘Individual’ is defined as ‘a person who is either a Partner or a Principal.’ ” Id. Importantly—and as I have decided before—“[t]he sole parties to the Partnership Agreement are the partners and principals of PwC; there is no such mandatory retirement provision for PwC employees.” ⁷ Id.

PwC is organized into business units called practice groups. Both Schuler and Murphy worked in the Washington, D.C.-based Regulatory Advisory Services practice group (“RAS”), a “niche practice” within the larger Banking group, during their tenure at PwC. Compl. ¶¶ 12–13; DSUMF ¶ 2. Practice groups are particularly important in the partnership process because the decision of whether to sponsor an employee for partnership is made, as an initial matter, at the business unit level—that is, within RAS for the plaintiffs. See DSUMF ¶ 3.

Not surprisingly, annual employee performance ratings also play a prominent role in the partnership-selection process. PwC evaluates performance with a rating system that ranges from “1” (the best rating) to “4.” DSUMF ¶ 4 (citing deposition testimony and prior opinions in the D.C. Circuit and this Court). PwC claims that in order to be sponsored for inclusion in the partnership, an employee must show “consistently outstanding performance over time.” ⁸ Id. Moreover, PwC claims that within the RAS group, an employee is considered for partnership only if he received ratings of “1” in each of the three years preceding sponsorship. Id.; see also Schuler II, 595 F.3d at 377 (“The record documents the existence and exercise of such a policy: Every candidate the RAS proposed for partner in the years for which there are data in the record (1999 through 2004) had a performance rating of ‘1’ in each of the three years before he was proposed.”).

PwC admits new partners in a given practice only when a “business case” exists for doing so.⁹ DSUMF ¶ 14 (citing deposition testimony and prior opinions from the D.C. Circuit and this Court). Candidacy begins when an employee is sponsored for partnership within his group. See id. ¶ 7. Sponsorship triggers the “soundings” stage, during which the candidate's name is submitted for partner feedback. Id.; Def.'s Ex. 8, at 163–64 [Dkt. # 236–9] (Lewis Dep.). According to PwC, an employee's performance in the soundings stage is measured by both the number of responses generated during soundings, and by the substance of the partners' feedback. See Def.'s Mot. for Summ. J. at 5; see also Def.'s Ex. 14 at 68 [Dkt. # 236–15] (Moritz Dep.). To wit, PwC states that a successful candidate typically generates twenty or more responses in the soundings process, with a large portion of those responses reflecting positive feedback about the candidate. Def.'s Mot. for Summ. J. at 5.¹⁰

B. Partnership Prospects for Murphy and Schuler

Although Murphy was based in Washington, D.C.'s RAS Unit, he worked on “36 engagements or proposals in New York ... [p]rior to and during the 2000 promotion cycle.” ¹¹ Murphy Opp'n at 5–6. In 1997, Murphy received a “2” on his annual performance review; in 1998, a “2;” in 1999, a “1;” and in 2001, a “3.” DSUMF ¶ 5; Def.'s...