A former PwC partner who sued the firm for $15 million just had a major setback in his case, pushing the pay spat behind closed doors

  • Jack Cahill was a tax partner who joined PwC in 2016 and sued the firm earlier this year for $15 million.
  • In his lawsuit, Cahill said he was deprived of credit for a client he brought to PwC that now does more than $10 million in business with the firm annually.
  • But PwC said Cahill was required to take up his grievances behind closed doors, and a judge granted the firm's request to send the case to arbitration.
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A former PwC tax partner who alleged he was pushed out of the firm after he was wrongfully deprived of credit for bringing in a major client has had his lawsuit moved to arbitration.

Jack Cahill, whose lawsuit against PwC revealed details about how the firm evaluates and compensates its partners, sued the firm in Minnesota last month. But PwC, also known as PricewaterhouseCoopers, asked a New York court to halt the case, saying Cahill had ignored his agreement to arbitrate, and the advisory giant won the decision it was seeking on Tuesday.

"The court's going to grant the petition," Justice O. Peter Sherwood said in an oral argument held via Skype on Tuesday.

Cahill said in court papers filed last month that PwC recruited him to join the firm in 2016 from Pine River Capital Management, an asset manager where he'd been a managing director and head of tax, according to his LinkedIn profile. He said he planned to work there until he was 60, which is PwC's mandatory retirement age.

His lawsuit provided a rare look behind the curtain at the politics and pay of a Big Four firm. Cahill said he was given goals for the revenue he had to bring in as a "lead tax partner" and "engagement partner" that would increase for his first three years. He said he secured his performance by bringing in a client, which he didn't name, that came to do $10 million in business a year with PwC.

But Cahill alleged he was forced to share credit for that client and ultimately forced off the engagement.

"PwC excluded Cahill from decision-making, strategy, meetings and conversations about Client A," Cahill wrote in his lawsuit, referring to the big client. "Cahill's only avenue to obtain information was directly from Client A and others at PwC."

Cahill suffered a partial defeat earlier this month when a Minnesota judge put his case on pause and allowed PwC to press forward with its claim that Cahill should be forced to arbitrate. Cahill alleged he was tricked into signing the firm's partnership agreement, or that his signature was invalid. But Sherwood said New York law was on PwC's side.

"We are pleased with the court's decision to compel arbitration per the terms of the partnership agreement," PwC said in a statement. "As we have stated from the outset, Mr. Cahill's claims have absolutely no merit. In accordance with the terms of its partnership agreement, PwC required Mr. Cahill to withdraw from the partnership based on his failure to meet the firm's performance expectations."

PwC is represented by Winston & Strawn, and Cahill is represented by Zeichner Ellman & Krause and Messerli Kramer. Lawyers for Cahill didn't immediately respond to a request for comment on the decision.

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