I’m sure when you’re a mega professional services firm like PwC, things like class-action litigation probably just start to feel normal after awhile. Last week we noted the firm’s pending trial with the bankruptcy trustee of MF Global and now we have this story from BloombergBNA that reports on more fun legal stuff:
PricewaterhouseCoopers LLP must defend against claims by a proposed class of rejected 40-and-over job seekers, a federal judge in California ruled. The applicants say the accounting giant’s hiring and other employment practices inadvertently favor younger applicants and deter older ones [Case reference omitted].
The decision rejects an opposing conclusion reached in October by the U.S. Court of Appeals for the Eleventh Circuit but embraces the view of the Equal Employment Opportunity Commission. It also signals a potential showdown among federal courts as to who may bring such “disparate impact” discrimination claims under the Age Discrimination in Employment Act [“ADEA”].
If you’re not familiar, “disparate impact” is an adverse effect on a class — in this case people over 40 who applied for jobs at PwC — even though the firm’s hiring practices are neutral in form. That is, PwC doesn’t strut around hiring hot young talent because that’s their policy; that would be illegal. The plaintiffs claim the firm discriminates against the over-40 crowd in practice. It’s sorta like a landlord that says he’ll rent to anyone regardless of race, religion or background, but then just so happens to have apartment buildings filled with white people.
PwC rejects the claims, of course. “The firm continues to believe that this provision of the ADEA does not apply to job applicants.”
Adventures in tax reform
Republican lawmakers want tax reform so bad they’d probably sacrifice their first born to make it happen. Right now, the plan cobbled together by Speaker of the House Paul Ryan and Ways & Means Committee Chairman Kevin Brady faces a lot of opposition because it adds border adjustment to the corporate system. Companies that import goods are fighting Ryan and Brady’s proposal, forming a new coalition called Americans for Affordable Products and getting their message out in every way possible:
AAP has gone a step further in trying to appeal to #teens and #millennials at the [Conservative Political Action Conference]: It bought a geotagged custom Snapchat filter, accessible to people using the app in close proximity to the conference, which allows people to snap their disapproval of this relatively arcane potential shift in corporate tax policy
Sure, why not.
Adventures in non-GAAP accounting
As you’ve most certainly heard, many companies like to use non-GAAP accounting metrics. The story goes that many companies use these non-GAAP measures to give investors a rosier picture of their business. Companies, on the other hand, like to say that these non-standard metrics present a more accurate picture of the economic reality of their businesses than GAAP. Many times that means excluding certain non-cash expenses, like depreciation or amortization, or non-recurring charges.
Lovable ol’ billionaire Warren Buffett famously rails against companies that use non-GAAP accounting metrics, most notably those who exclude stock-based compensation. Francine McKenna writes in MarketWatch that Buffett’s harping is a little ironic given that his company, Berkshire Hathaway, uses them too and that the SEC requested “a reconciliation of non-GAAP operating expenses to GAAP operating expense reported for its manufacturing, service and retailing business segment,” last year. Berkshire excluded “amortization of certain intangible assets” and Buffett’s reasoning will sound familiar:
In his letter to shareholders in February, Buffett rationalized that move, writing, “we present the data in this manner because Charlie [Munger] and I believe the adjusted numbers more accurately reflect the true economic expenses and profits of the businesses aggregated in the table than do GAAP figures.”
Previously, on Going Concern…
In other news:
- Accountants aid fight against global corruption
- Before you delete your account, Uber wants you to know it’s ‘deeply hurting’
- Norwegian Air to offer U.S.-Europe fares starting at $65 one way
- Change Your Passwords. Now.
- Could A Bumblebee Learn To Play Fetch? Probably
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