Pippins v. KPMG LLP
2012 U.S. Dist. LEXIS 173918
S.D.N.Y.2012Background
- Plaintiffs allege FLSA overtime violations and NYLL claims against KPMG by Audit Associates across multiple states.
- Court granted summary judgment for KPMG on the FLSA professional-exemption defense, dismissing federal claims with prejudice.
- State-law NYLL claims were dismissed without prejudice to refile in New York State Supreme Court.
- Audit Associates are the firm’s junior auditors who work on site with engagement teams under supervision and use KPMG guidance materials and eAudit.
- The court concluded Audit Associates perform work requiring advanced accounting knowledge and consistent judgment, fitting the learned professional exemption.
- The decision relies on industry standards, training programs, and supervision as supportive of professional-exemption status; NYLL claims remain non-preclusive of future state actions.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Audit Associates are exempt as learned professionals under the FLSA | Lambert et al. claim non-exempt due to routine, template-driven work. | KPMG contends primary duties require advanced knowledge and professional skepticism. | Yes; Audit Associates are exempt learned professionals. |
| Whether the administrative exemption analysis is necessary given professional exemption | Plaintiffs contend administrative exemption may apply; merits disputed. | Court should rely on professional exemption; administrative issue moot. | Moot; professional exemption controls. |
| Whether NYLL claims should be dismissed or stayed | Plaintiffs seek retention of state-law claims. | State claims should proceed separately if federal is resolved. | Dismissed without prejudice to refiling in NY State court. |
| Whether the evidence shows Audit Associates exercise discretion and judgment | Work is rote, templates dictate conclusions. | Industry standards require professional skepticism and judgment. | Audit Associates exercise discretion and judgment; qualify as professionals. |
Key Cases Cited
- Christopher v. SmithKline Beecham Corp., 132 S. Ct. 2156 (2012) (supports applicability of learned professional standard)
- Solis v. Washington, 656 F.3d 1079 (9th Cir. 2011) (specialized academic training necessary for learned professional exempt)
- De Jesus-Rentas v. Baxter Pharmacy Services Corp., 400 F.3d 72 (1st Cir. 2005) (learned professional exemption boundaries in professions)
- Dybach v. State of Florida Dept. of Corrections, 942 F.2d 1562 (11th Cir. 1991) (educational requirements for learned professionals)
- Fife v. Harmon, 171 F.3d 1173 (8th Cir. 1999) (need for specialized academic training for learned professional)
- Novartis Wage & Hour Litigation, 611 F.3d 141 (2d Cir. 2010) (discusses administration exemption standards (context cited))