Could pay equity really still be an issue, now, in the year 2017, with all the talk and awareness about diversity and discrimination? could pay equity still be an issue? Yep. Don’t take my word for it, though. Several major settlements or pending lawsuits say otherwise. Read on and you will see for yourself.
(image from bizjournals.com)
Most of us know that pay discrimination based on sex is illegal. The Equal Pay Act of 1963, an amendment to the Fair Labor Standards Act, says so. Specifically, it prohibits discriminating based on sex:
” by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs[,] the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex”.
Title VII of the Civil Rights Act of 1964 prohibits discrimination relating to hiring and terms and conditions of employment on the basis of race, color, religion, sex or national origin. Affirmative action laws, which took effect in 1965 apply to federal contractors. Companies with 50 or more employees and contracts with federal agencies valued at $50,000 or more actually must engage in proactive efforts to ensure workplace diversity and, in this case, equal pay for similarly situated employees.
Now let’s look at some cases:
In 2013, a former sales rep sued Merck, claiming it paid female sales reps less than male reps and thwarted women’s attempts at advancement, allegedly demoting, sexually harassing or pushing pregnant and working mothers to leave the company. This case is now a class-action suit with more than 400 women across the nation having joined. The plaintiffs seek $250 million in damages.
The Merck case mirrors cases against Daiichi Sankyo, and Novartis, who each paid a cool $8.2 million to settle similar allegations in 2015 and 2016 respectively. In 2015, Bayer Corp paid an undisclosed amount to settle pay discrimination allegations against it and four other Bayer healthcare entities. A $100 million pay discrimination case against Forest Labs appears to still be pending.
Pharmaceutical companies are not the only ones being sued, however. Last year, a former Assistant Attorney General sued the Virginia Attorney General’s Office alleging pay discrimination under the EPA and retaliation, when approximately 10 weeks after filing a pay discrimination complaint, she was fired. The case, Reardon v. Herring, No. 3:16CV34, 2016 WL 4472963 (E.D. Va. Aug. 23, 2016), having withstood a motion to dismiss, is still pending.
Even soccer has taken a hit. The US women’s soccer team filed an EEOC charge alleging they are paid significantly less than the men’s soccer team, even though, according to the women’s team, they have generated significantly more revenue.
Finally, the Office of Federal Contract Compliance Programs, (OFCCP) has also gotten into the act. The OFCCP in an audit, asked Google (who has $758,600 in federal contracts) for compensation data. When Google would not turn over the requested data, the OFCCP sued. To be fair, the OFCCP requested compensation information dating back to the company’s formation — years before it even had the federal contracts in question. The court agreed with Google,that the OFCCP’s went overboard in its request. Google, however is still in the middle of an audit that is now focused on its compensation practices. In January 2017 the OFCCP sued Oracle, alleging that it pays white men more than women and minorities, even after accounting for full-time status, prior work experience, company tenure, and favored Asian applicants in its recruiting and hiring practices for technical positions, such as product development.
I don’t know about you, but I’m seeing a pattern here. That said, here are my takeaways:
- Pay discrimination is a problem today and the issue is not going away;
- Most of the above employers are large and have deep pockets. Small employers are not immune, however. They may, however, be in less of a position to take a hit than large employers;
- Examine your pay practices and look for –and either address or explain–pay discrepancies–and document what you did or didn’t do and why.
- Now for our favorite advice: consult with employment counsel;
- Learn more about this issue. Some good starting places: my webinar on Pay Equity. If you are a federal contractor and want to learn more about affirmative action compliance, this webinar might be a good fit for you.
Let’s end here for now. See you next week!
Contents of this post are for educational/informational purposes only, are not legal advice, and do not create an attorney-client relationship. Consult with competent employment counsel in the state(s) in which you employ people with your specific questions.
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