Schuler v. PRICEWATERHOUSECOOPERS, LLP

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 13, 2009 Decided February 16, 2010

No. 08-7115

HAROLD SCHULER,

APPELLANT

v.

PRICEWATERHOUSECOOPERS, LLP, ET AL.,

APPELLEES

Consolidated with 08-7116, 08-7120

Appeals from the United States District Court

for the District of Columbia

(No. 1:02-cv-00982-RJL)

Richard A. Salzman argued the cause for appellant C.

Westbrook Murphy. Joshua N. Rose argued the cause for

appellant Harold Schuler. With them on the briefs were

Douglas B. Huron and David L. Rose. Tammany M. Kramer

entered an appearance.

Howard M. Shapiro argued the cause for appellee. With

him on the brief were Juanita A. Crowley, Edward C.

DuMont, Eric M. Nelson, and Stephen L. Sheinfeld.

2

Before: GINSBURG and HENDERSON, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge GINSBURG.

GINSBURG, Circuit Judge: The appellants, Harold Schuler

and C. Westbrook Murphy, sued PricewaterhouseCoopers,

LLP (PwC) alleging the firm refused to make them partners

because of their ages, in violation of the Age Discrimination

in Employment Act (ADEA), 29 U.S.C. § 621 et seq., the

District of Columbia Human Rights Act (DCHRA), D.C.

Code § 2-1401.01 et seq., and the New York Human Rights

Law (NYHRL), N.Y. Exec. Law § 290 et seq. The district

court (1) dismissed as untimely Schuler’s claims under the

ADEA for 1999 and 2000, (2) granted summary judgment for

PwC on Schuler’s claims under the ADEA and DCHRA for

2001 and on Murphy’s claims under those laws for 2000,

2001, and 2004, and (3) dismissed all counts under the

NYHRL for failure to state a claim.

We reverse the judgment of the district court insofar as it

dismissed the claims brought under the NYHRL. In all other

respects we affirm the judgment of the district court.

I. Background

PwC is a partnership headquartered in New York that

provides accounting, auditing, and other services to clients

worldwide. It has more than 20,000 employees and more

than 2,000 partners in the United States. The partnership

agreement provides each partner shall retire upon reaching

age 60 but in extraordinary circumstances a partner may delay

retirement until he reaches age 62. The structure of the

compensation and benefits package provided to a new partner

3

makes it financially undesirable for most employees over the

age of 55 to become partners.

During the years relevant to this case, PwC was

organized into several divisions, which were subdivided into

practices, each comprising multiple practice groups. The firm

hired Schuler in 1988, when he was 44 years old, and Murphy

in 1989, when he was 49, to work in the Regulatory and

Advisory Services (RAS) practice group in Washington, D.C.

The RAS was part of the banking practice, which was in turn

a part of the Audit and Business Advisory Services division.

The RAS had four or five partners and about two-dozen other

employees.

The process for selecting a new partner at PwC began at

the practice group level. Each year the managing partner or a

group of partners in each practice group could propose one or

more employees to be considered for partner. Current

partners were then asked to submit their reviews of that

employee — called “soundings” — to an evaluation

committee. An employee who received sufficiently numerous

and favorable soundings proceeded through further stages of

review and could be made a partner as of July of the

following year.

In 1998 the RAS proposed Schuler, then 55, for partner.

Only 12 partners submitted “soundings” about Schuler (six

favorable, two unfavorable, and four reporting insufficient

information), and he was not made a partner in 1999.

In 1999 the head of the RAS proposed another employee,

then 37 years old, for partner. He also wanted to propose

Schuler again but the head of the banking practice was not

amenable because, as he later explained, he believed there

had been “no significant change in circumstances or views”

about Schuler since the previous year. Twenty-two partners

submitted soundings about the other candidate (17 favorable,

none unfavorable, and five reporting insufficient information)

and he became a partner in 2000.

4

In 2001, a year in which the RAS proposed no one for

partner, Schuler and Murphy each filed an administrative

charge with the District of Columbia Office of Human Rights

and cross-filed the charge with the Equal Employment

Opportunity Commission (EEOC). Each alleged PwC had

refused to consider him for promotion to partner because of

his age — Schuler in 1999, 2000, and 2001 and Murphy in

2000 and 2001.

In 2002 Schuler and Murphy sued PwC, alleging, among

other things, the firm had “denied [them] promotion to partner

in 1999, 2000, and 2001 ... in violation of the ADEA, the

DCHRA, and the [NYHRL].” PwC moved to dismiss

Schuler’s 1999 and 2000 and Murphy’s 1999 claim under the

ADEA because “the plaintiffs failed to file a timely

administrative charge.” Murphy v. PricewaterhouseCoopers,

LLP, 357 F. Supp. 2d 230, 237 (D.D.C. 2004). The ADEA

required each appellant, before suing, to have filed an

administrative charge with the EEOC within 300 days of the

alleged discriminatory action, see 29 U.S.C. § 626(d)(1), but

Schuler filed his charge on June 29, 2001, more than 300 days

after he did not become a partner in July 2000 (let alone July

1999), and Murphy filed his charge on March 14, 2001, more

than 300 days after he did not become a partner in 1999.

PwC also moved to dismiss all counts under the NYHRL for

failure to state a claim upon which relief could be granted

because they did not allege a discriminatory act had occurred

in New York. Finally, PwC moved to dismiss all claims

under the DCHRA on the ground that the “exercise of ...

supplemental jurisdiction [was] not appropriate” because

those claims “predominate[d] over the remaining federal

claims.” Murphy, 357 F. Supp. 2d. at 237, 245. The district

court granted PwC’s motion, to the extent relevant here, by

dismissing as untimely Schuler’s claims under the ADEA for

1999 and 2000 and dismissing all counts under the NYHRL

for failure to state a claim upon which relief could be granted.

5

See id., 357 F. Supp. 2d at 239–40, 244. The district court

also dismissed as untimely Murphy’s 1999 claim under the

ADEA, which ruling Murphy has not appealed.

In 2003, the RAS proposed another employee for partner.

He received 18 soundings (16 favorable, none unfavorable,

and two reporting insufficient information) and became a

partner in 2004, when he was 39.

In 2005 the appellants each filed a new lawsuit. Murphy

alleged PwC did not make him a partner in 2004 because of

his age, in violation of the ADEA and the DCHRA. The

district court consolidated Murphy’s new suit with the one he

and Schuler had filed in 2002; it is these consolidated cases

that are now before us on appeal. Schuler’s 2005 lawsuit

alleged “PwC has engaged in a pattern and practice of age

discrimination in making decisions regarding assignments and

promotions in violation” of the same two statutes, see Schuler

v. PricewaterhouseCoopers, LLP, 514 F.3d 1365, 1369 (D.C.

Cir. 2008) (quoting complaint); that suit is pending in the

district court (No. Civ. 05cv2355 (RJL)).

That same year the district court denied PwC’s motion

for summary judgment on the appellants’ remaining claims

under the ADEA and DCHRA. In 2008, however, after the

close of discovery PwC again moved for summary judgment,

which the district court granted as to Murphy’s claims under

the ADEA and DCHRA for 2000, 2001, and 2004 and as to

Schuler’s claims under those statutes for 2001. The court

concluded each had “failed to rebut PwC’s legitimate, non-

discriminatory explanations” for not making him a partner

and had “not presented sufficient evidence to support a

finding ... of intentional discrimination based on age.”

Murphy v. PricewaterhouseCoopers, LLP, 580 F. Supp. 2d 4,

12 (2008) (Murphy); Murphy v. PricewaterhouseCoopers,

LLP, 580 F. Supp. 2d 16, 28 (2008) (Schuler). The court also

dismissed Schuler’s claims under the DCHRA for 1999 and

2000 as untimely because they “rel[ied] on discriminatory

6

acts occurring more than one year before the filing of

Schuler’s initial administrative complaint.” Murphy, 580 F.

Supp. 2d. at 25–26.

II. Analysis

Schuler and Murphy challenge the district court’s 2004

dismissal of their claims under the NYHRL and of Schuler’s

claims under the ADEA for 1999 and 2000. They also

challenge respectively the court’s grant of summary judgment

in 2008 on Schuler’s claims under the ADEA and DCHRA

for 2001 and on Murphy’s claims under those statutes for

2000, 2001, and 2004.

A. Schuler’s 1999 and 2000 claims under the ADEA

Schuler does not dispute that in 2004 the district court

correctly dismissed as untimely his ADEA claims for 1999

and 2000. Schuler maintains, however, that the Lilly

Ledbetter Fair Pay Act of 2009 (LLA), Pub. L. No. 111-2,

123 Stat. 5, which applies by its terms to claims of

“discrimination in compensation” pending on or after May

28, 2007, § 6, 123 Stat. at 7, made his claims timely. Section

4 of the LLA provides, in relevant part:

[A]n unlawful practice occurs, with respect to

discrimination in compensation in violation of

[the ADEA], when a discriminatory

compensation decision or other practice is

adopted, when a person becomes subject to a

discriminatory compensation decision or other

practice, or when a person is affected by

application of a discriminatory compensation

decision or other practice ....

7

Misquoting the statute, Schuler argues the decision not to

promote him was an “‘other act’ ... intertwined with a

discriminatory compensation decision” because as a result of

that decision he received significantly less remuneration than

he would have done as a partner. In support of this position

he refers us to the decisions of two district courts interpreting

the LLA, see Gentry v. Jackson State Univ., 610 F. Supp. 2d

564, 566 (S.D. Miss. 2009); Rehman v. State Univ. of N.Y.,

596 F. Supp. 2d 643, 651 (E.D.N.Y. 2009), and to the failure

of two proposed amendments, one to the 2009 bill that

became the LLA and one to an identical bill proposed in

2007, that would have deleted the phrase “other practice.”

Schuler contends the failure of those amendments “makes

clear that Congress did not intend to limit the [LLA] only to

‘compensation decisions.’”

For its part, PwC distinguishes between an employee’s

claim he was paid less than another employee for doing

similar work and Schuler’s claim that he should have been

promoted to a higher paying position. The former is clearly

discrimination in compensation and covered by the LLA; the

latter, PwC argues, is not.

There can be no dispute that in order to benefit from the

LLA Schuler must bring a claim involving “discrimination in

compensation” and point to a “discriminatory compensation

decision or other practice.” The question is whether he did so

by claiming PwC did not make him a partner because of his

age. The answer is that he did neither.

As PwC’s distinction implies, in employment law the

phrase “discrimination in compensation” means paying

different wages or providing different benefits to similarly

situated employees, not promoting one employee but not

another to a more remunerative position. See Anderson v.

Zubieta, 180 F.3d 329, 338 (D.C. Cir. 1999) (plaintiff

alleging “wage discrimination” under Title VII must show he

was “performing work substantially equal to that of …

8

employees ... compensated at higher rates” (internal quotation

marks omitted)); Taylor v. United Parcel Serv., Inc., 554 F.3d

510, 522 (5th Cir. 2008) (prima facie case of “discrimination

in compensation” under Title VII involves showing plaintiff

“was paid less than a non-member [of the protected class] for

work requiring substantially the same responsibility”);

MacPherson v. Univ. of Montevallo, 922 F.2d 766, 774 (11th

Cir. 1991) (proof of “discrimination in compensation” under

ADEA requires showing “similarly situated persons outside

the protected age group received higher wages”). In contrast,

a discriminatory failure to promote is actionable regardless

whether it affects an employee’s compensation. See, e.g.,

MacKenzie v. City & County of Denver, 414 F.3d 1266,

1277–78 (10th Cir. 2005) (prima facie case of “failure-to-

promote” under ADEA requires showing only that qualified

plaintiff was rejected and “position was filled by someone

outside the protected class”); Cones v. Shalala, 199 F.3d 512,

514, 516 (D.C. Cir. 2000) (prima facie case of “deni[al] [of] a

promotion” under Title VII requires showing only that

qualified plaintiff was rejected and “either someone not of his

protected class filled the position or the position remained

vacant and the employer continued to seek applicants”). In

context, therefore, we do not understand “compensation

decision or other practice” to refer to the decision to promote

one employee but not another to a more remunerative

position.

Our interpretation of the LLA is fully consistent with the

patent intent of the Congress to overrule the Supreme Court’s

decision in Ledbetter v. Goodyear Tire & Rubber Co., 550

U.S. 618 (2007), see § 2, 123 Stat. at 5. The plaintiff there

claimed she was the victim of discrimination because, based

upon allegedly discriminatory performance reviews, she “was

being paid significantly less than any of her male colleagues,”

550 U.S. at 622, and the Court repeatedly referred to her

claim as one of “pay discrimination,” id. at 622–23, 638–42.

9

The Court held Ledbetter’s claim was untimely because she

filed an administrative charge too long after the decisions

about her compensation were made. Id. at 627. In the LLA

the Congress characterized Ledbetter as having “significantly

impair[ed] ... protections against discrimination in

compensation” and “ignore[d] the reality of wage

discrimination.” § 2, 123 Stat. at 5. That the Congress

drafted and passed the LLA specifically in order to overturn

Ledbetter strongly suggests the statute is directed at the

specific type of discrimination involved in that case and not to

other unspecified types of discrimination in employment.

Nor does our interpretation of the phrase “discriminatory

compensation decision or other practice” read “other

practice” out of the statute. We need look no further than

Ledbetter itself for an example of a discriminatory “other

practice,” viz., giving an employee a poor performance

evaluation based upon her sex (or any other unlawful

criterion) and then using the evaluation to determine her rate

of pay. See 550 U.S. at 622.

For these reasons, we conclude the decision whether to

promote an employee to a higher paying position is not a

“compensation decision or other practice” within the meaning

of that phrase in the LLA and Schuler’s failure-to-promote

claim is not a claim of “discrimination in compensation.”

The LLA therefore does not revive his claims under the

ADEA. *

*

In his Reply Brief (at 18–19) Schuler also argues his 2000 ADEA

claim is timely because he can “piggyback” upon Murphy’s timely

administrative charge filed in 2001. In his opening brief, however,

Schuler refers to piggybacking only in a footnote, App. Br. 54 n.17,

in which he makes no affirmative argument that he should be

allowed to piggyback, contending only the reasons the district court

gave for denying piggybacking were wrong. Because he first

makes his affirmative argument in his reply brief, we do not

consider it. See, e.g., Students Against Genocide v. Dep’t of State,

10

B. Other Claims under the ADEA and the DCHRA

We review de novo the district court’s grant of summary

judgment on Schuler’s 2001 and on Murphy’s 2000, 2001,

and 2004 claims under the ADEA and DCHRA. See

Venetian Casino Resort, LLC v. EEOC, 530 F.3d 925, 929

(2008). In order to prevail at summary judgment, the plaintiff

in an ADEA case must show that a reasonable jury could find

his age was the “but-for” cause of the employment action he

challenges. See Gross v. FBL Fin. Servs., Inc., 129 S. Ct.

2343, 2352 (2009); see also Baloch v. Kempthorne, 550 F.3d

1191, 1198 (D.C. Cir. 2008) (plaintiff must “produce[]

evidence sufficient for a reasonable jury to find” non-

discriminatory reason offered by employer was “not the

actual reason” for challenged action and “employer

intentionally discriminated against [plaintiff] based on his ...

age” (internal quotation marks omitted)) (citing Brady v.

Office of Sergeant at Arms, 520 F.3d 490, 495 (D.C. Cir.

2008)).

The courts of the District of Columbia “look[] to federal

court decisions interpreting the [ADEA] when evaluating age

discrimination claims under the DCHRA.” Washington

Convention Ctr. Auth. v. Johnson, 953 A.2d 1064, 1073 n.7

(D.C. 2008). Under current D.C. precedent, which predates

the Supreme Court’s recent decision in Gross, a claimant

under the DCHRA, if he is to survive summary judgment,

must show a reasonable jury could find his age “had a

determinative influence on the” challenged employment

257 F.3d 828, 835 (D.C. Cir. 2001) (“we have repeatedly held that

an argument first made in a reply brief ordinarily comes too late for

our consideration”); see also United States v. Whren, 111 F.3d 956,

958 (D.C. Cir. 1997) (“absent extraordinary circumstances ... we do

not entertain an argument raised for the first time in ... a footnote”).

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action. Id. at 1073 (citing Reeves v. Sanderson Plumbing

Prods., 530 U.S. 133, 141 (2000)) (internal quotation marks

omitted); see also Hamilton v. Howard Univ., 960 A.2d 308,

314 (D.C. 2008) (stating issue as whether age “actually

motivated the employer’s decision”). We need not determine

whether D.C. case law prescribes a meaningfully different

standard from the one in Gross because, based upon the

evidence in this case, no reasonable jury could believe either

appellant’s age “had a determinative influence” upon PwC’s

failure to promote him or was the “but-for” cause of that

decision.

As for Schuler, PwC maintains it did not make him a

partner in 2001 because there was no business case for doing

so. The record shows business conditions had deteriorated: In

2000 and in 2001 the RAS nominated no one for partner, and

Schuler himself acknowledged there was “slow economic

activity and not a lot ... of regulatory action” in “2000-2001.”

Schuler presents no evidence rebutting that explanation. He

points to a statement made by the head of the RAS in

September 1999 when proposing him for partnership — the

“RAS is booming and I need full time partners” — but it is

anachronistic and therefore unavailing.

Murphy likewise fails to provide any basis upon which a

reasonable jury could disbelieve PwC’s primary explanation

for not making him a partner, viz., that employees were rated

on a scale of “1” to “4,” with “1” being the highest; the RAS

proposed for partnership only employees with performance

ratings of “1” in each of the three prior years; and Murphy

was not promoted because he did not meet that requirement.

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, see Murphy v.

PricewaterhouseCoopers, LLC, 580 F. Supp. 2d 4, 13 n.15

12

(D.D.C. 2008) (noting this fact), and Murphy did not have

three years of “1”s immediately before any year in which he

claims he should have been made a partner — 2000, 2001, or

2004. Murphy does not contest these facts.

Murphy does, however, maintain a reasonable jury could

find he received relatively low performance ratings only

because those rating him believed that, in view of his age,

PwC would never make him a partner. As evidence of a

general policy not to make older employees partners, Murphy

points to the provision for mandatory retirement in the

partnership agreement, to the modest number of employees

who were made partner after turning 50 (between 1998 and

2005 only 61 (3.6%) of new partners were 50 or older; six

(0.4%) were aged 55-59), and to comments three PwC

executives made about the value of bringing in younger

partners. No reasonable jury, however, could conclude from

this general evidence that Murphy’s ratings in particular were

the result of his age and not of his performance; the record

shows in the RAS alone at least two other employees over the

age of 50 each received ratings of “1” in multiple years.

Indeed, his co-plaintiff Schuler had received ratings of “1” for

each of the three years prior to his 1998 nomination for

partner, when he was 54. *

Finally Murphy asks us to provide “guidance” as to

whether the provision in the partnership agreement making

retirement mandatory at age 60 or 62 violates the ADEA

because, he says, the issue “is likely to rise [sic] again in this

litigation.” He contends most partners at PwC are more like

employees than owners of the firm and are therefore entitled

to the protection of the statute, which prohibits any mandatory

retirement age for employees over 40. See 29 U.S.C. §

623(a)(2) (unlawful to “limit” an employee in “any way

*

The appellants make other arguments, but they do not warrant

treatment in a published opinion.

13

which would deprive [him] of employment opportunities” or

“adversely affect his status as an employee because of [his]

age”); see also Clackamas Gastroenterology Assocs., PC v.

Wells, 538 U.S. 440, 445–46 (2003) (employees, but not

owners, of firm protected by antidiscrimination laws).

Be that as it may, the district court correctly observed, in

declining to pass upon the issue, that nothing in the present

case turns upon it. See Murphy, 580 F. Supp. 2d at 16 n.22.

Murphy seems to suggest the legality of the retirement

provision affects whether he should prevail here, but it does

not: Even if the partnership agreement violated the ADEA,

that violation would have no bearing upon whether a

reasonable jury could disbelieve PwC’s explanation for not

making Murphy a partner. Because a federal court does not

have jurisdiction to issue an advisory opinion, see, e.g., Flast

v. Cohen, 392 U.S. 83, 95 (1968) (“no justiciable controversy

is presented ... when the parties are asking for an advisory

opinion”), we must decline Murphy’s request to consider the

issue.

C. Claims under the NYHRL

The district court dismissed all counts under the NYHRL

for failure to state a claim upon which relief could be granted.

Murphy v. PricewaterhouseCoopers, LLP, 357 F. Supp. 2d

230, 244 (2004). Reviewing the issue de novo, Covad

Commc’ns Co. v. Bell Atl. Corp., 398 F.3d 666, 670–71 (D.C.

Cir. 2005), we conclude the district court erred.

The district court reasoned that in order to assert a claim

under the NYHRL a non-New-York resident such as Schuler

or Murphy “must allege that the actual impact of the

discriminatory act was felt in New York,” Murphy, 357 F.

Supp. 2d at 244, which the appellants have not done. In an

intervening decision in a related case we held it is enough that

a discriminatory act occurred in New York. Schuler v.

14

PricewaterhouseCoopers, LLP, 514 F.3d 1365, 1378 (2008).

Thereafter the district court declined to reinstate the

appellants’ claims because it found “no evidence ... an act of

discrimination occurred in New York.” Murphy v.

PricewaterhouseCoopers, LLP, 580 F. Supp. 2d 16, 22 n.17

(2008).

The relevant question is whether the appellants’

complaint alleges facts that, if true, would establish a

violation of the NYHRL. See Fed. R. Civ. P. 12(b)(6). The

appellants allege PwC did not promote them because it has a

policy of promoting only younger employees. Both that

policy and a decision pursuant thereto, if adopted in New

York, would violate § 296 of the NYHRL.

In Schuler we held that, in view of his “assertion that the

company is headquartered in New York,” Schuler was

entitled to the “reasonable inference” the alleged policy was

adopted in New York. 514 F.3d at 1377. Based upon our

reasoning in that case the appellants argue they are entitled to

the reasonable inference the discrimination alleged in this

case occurred in New York. * PwC says Schuler “does not

control” because it addressed only PwC’s adoption and

maintenance of a discriminatory policy, not the “discrete

decision[] not to admit [Schuler] to partnership.” To which

we say: Pettifoggery and piffle!

Because the appellants in this case allege PwC is

headquartered in New York, Compl. ¶ 4, both appellants are

entitled to the reasonable inference the decisions not to

promote them occurred in New York. The district court’s

rationale for dismissing the claims under the NYHRL both as

to Schuler and as to Murphy was therefore incorrect.

*

Although the appellants’ briefs focus in this respect upon Schuler,

their opening brief makes clear both “[p]laintiffs … appeal … the

district court’s order … dismissing their claims under the

[NYHRL],” and our analysis is equally applicable to both.

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III. Conclusion

For the foregoing reasons, we affirm the judgment of the

district court with respect to all claims brought under the

ADEA or the DCHRA. We reverse the judgment of the

district court with respect to the claims brought under the

NYHRL, which claims we remand to the district court for

further proceedings.

We recognize our decision leaves only state-law claims

pending in the district court. “Even if only state-law claims

remain[] after resolution of the federal question,” however, a

district court has “discretion ... to retain jurisdiction.” Osborn

v. Haley, 549 U.S. 225, 245 (2007). And “once it has

invested time and resources” in a case, “[c]onsiderations of

judicial economy, convenience and fairness to litigants ...

make it reasonable and proper for a federal court to proceed

to final judgment” upon the state-law claims. Id. (internal

citation and quotation marks omitted).

So ordered.