#MeToo One Year Later – Employers’ Responses to the Movement

On October 15, 2017, the #MeToo movement began in earnest following a tweet by actress Alyssa Milano. To commemorate the one-year anniversary of the #MeToo movement, the Orrick Employment Law and Litigation Blog will analyze the effects of the movement from the employment perspective. Part 1 reviewed the movement’s impact on sexual harassment claims in the workplace, Part 2 focused on the legislative reaction to the movement, and Part 3 below discusses how employers have responded to #MeToo.

Over the past year, the #MeToo movement has caused a seismic shift in our culture that continues to ripple through important aspects of our daily lives, especially the workplace. As we previously discussed, the #MeToo movement’s growing momentum has sparked rising trends in sexual harassment claims and lawsuits, as well as a significant increase in EEOC charges and enforcement efforts. In the past year, the EEOC revealed that it filed 41 lawsuits with sexual harassment allegations, which is a 50 percent increase from 2017. In addition, litigation and administrative enforcement of sexual harassment issues yielded nearly $70 million to the EEOC in 2018, up from $47.5 million the prior year. But newly filed lawsuits or administrative charges only reveal a part of the impact – claims of sexual harassment may have a devastating effect on those accused of wrongdoing and their employers, even if they lie far beyond any applicable statute of limitations, as today’s claims often do. Employers of all shapes and sizes are acclimating their policies and practices for the #MeToo era, as none can avoid the categorical shift in workplace culture that is slowly becoming the “new normal.” READ MORE

#MeToo One Year Later: The Legislative Reaction

On October 15, 2017, the #MeToo movement began in earnest following a tweet by actress Alyssa Milano. To commemorate the one-year anniversary of the #MeToo movement, the Orrick Employment Law and Litigation Blog will analyze the effects of the movement from the employment perspective. Part 1 reviewed the movement’s impact on sexual harassment claims in the workplace, Part 2 below focuses on the legislative reaction to the movement, and Part 3 discusses how employers have responded to #MeToo. READ MORE

Now We’ve Got Your Attention: Recent Amendments to SF Fair Chance Ordinance Give Job Applicants Right to Sue and Send Penalties Soaring

San Francisco recently added significant teeth to its “Fair Chance” ordinance, which is designed to give applicants who have criminal histories a chance to get their foot in the door without being automatically disqualified.

This is the next step in the “ban the box” movement, for which several cities, counties and states have passed laws restricting employers from inquiring about a job applicant’s criminal background. The term “ban the box” refers to questions on an employment application that ask a job applicant about past convictions. Proponents of “ban the box” laws argue they will help remove unfair employment barriers to job applicants with criminal histories.

In California, San Francisco and Los Angeles have instituted “Fair Chance” ordinances that require employers to state on their job postings that an arrest or conviction will not automatically disqualify a qualified application from consideration from employment. Recent amendments to the San Francisco Fair Chance Ordinance went into effect on October 1, 2018. These amendments:

  • Expand the scope of the law to cover any employer with 5 or more employees. Previously, the law covered employers with 20 or more employees.
  • Prohibit employers from inquiring about a person’s criminal history until after a conditional offer of employment has been made.
  • Prohibit employers from considering any convictions for decriminalized behavior (e.g., marijuana related convictions). Previously, the law had allowed such inquiries for convictions that were seven years old or less.
  • Increase penalties for non-compliance from a per-violation maximum of $100 to $2,000.
  • Direct that penalties must be paid directly to affected employees. Penalties were previously paid to the City.
  • Creates a new private right of action for any employee or applicant whose rights have been violated. Previously only the City Attorney could sue to enforce the law.
  • Requires that covered employers display a new poster in the workplaces as of October 1, 2018.

In addition to fair chance ordinances like San Francisco’s, California employers must also be mindful of other recent legislation that will have an impact on the hiring process, including state-wide legislation enacted in July 2018 that prohibits employers from inquiring into the salary history of their applicants. More on that here.

As always, employers are well advised to reach out to Orrick counsel for assistance navigating this complex area of law.

#MeToo One Year Later: A Viral Hashtag with Lasting Effects

On October 15, 2017, the #MeToo movement began in earnest following a tweet by actress Alyssa Milano.  To commemorate the one-year anniversary of the #MeToo movement, the Orrick Employment Law and Litigation Blog will analyze the effects of the movement from the employment perspective.  Part 1 below looks at the movement’s impact on sexual harassment claims in the workplace, Part 2 focuses on the legislative reaction to the movement, and Part 3 discusses how employers have responded to #MeToo.

READ MORE

Back to School! How to Navigate School-Related Leave for Employees

With school back in session, employees may be asking for time off to go to their children’s school activities. Employers should know that several states and the District of Columbia require or encourage employers to provide employees with school-related time off. It is time to make sure employers are compliant with these laws. READ MORE

California #TakesTheLead on Harassment Laws: What Does It Mean for Employers?

As you’ve likely been monitoring, last month the California legislature passed several bills to Governor Brown for signature relating to sexual harassment. The hashtag #TakeTheLead emerged as a symbol reflecting California’s potential to become the state at the forefront of passing additional legislation characterized as increasing protection for women – and workers generally – in the face of the #MeToo movement. Late Sunday night, in the last moments before Governor Brown’s September 30 deadline, he vetoed the most contentious bill – AB 3080 – and signed into law many of the other pending bills. READ MORE

Worth the Wait: NYS Clarifies Requirements for Sexual Harassment Prevention Programs

One week before the October 9, 2018 deadline for compliance with the statewide sexual harassment prevention mandate (the “Mandate”), New York Labor Law § 201-g, New York State released revised model documents available on the state website: READ MORE

Right of Co-determination of the German Works Council on Stock Options of U.S. Parent?

The German Federal Labor Court (judgment of March 20, 2018 – 1 ABR 15/17) has recently clarified a matter of considerable practical relevance for U.S. companies offering stock options to employees of their Germany-based subsidiaries: Does the German subsidiary’s works council have a right to be involved when it comes to offering stock options? READ MORE

FCRA Developments: Updated Summary of Rights & “Stand-Alone” Disclosure Need Not Be Separate In Time

Employers across the country should dust off their background check policies and forms and be mindful of recent developments related to the federal Fair Credit Reporting Act (FCRA).

FCRA mandates specific, technical steps for employers using consumer reports to make employment decisions, including hiring, retention, promotion or reassignment.  While many employers are familiar with the importance of following FCRA requirements, actual compliance with the law can be tedious and challenging.  As the law continues to evolve, employers should be aware of recent updates to the model federal form for consumer rights and recent guidance from a California federal court related to the “stand-alone” disclosure and authorization requirement. READ MORE

Cert Denied in Potential Harbinger for California Equal Pay Act Class Actions

On August 28, 2018, a judge in Los Angeles County Superior Court issued one of the first decisions – if not the first decision – on a motion to certify a putative class action under the state’s revised Equal Pay Act, Cal. Labor Code § 1197.5 (“EPA”).  See Bridewell-Sledge, et al. v. Blue Cross of California, No. BC477451 (Los Angeles Sup. Ct. Aug. 28, 2018) (Court’s Ruling and Order re: Pls.’ Mot. for Class Certification).  Specifically, the court denied the plaintiffs’ motion to certify classes of all female and all African American non-exempt employees of Anthem Blue Cross California and related entities.  The complaint alleged both violations of the EPA, as well as discrimination in promotions and pay in violation of the Fair Employment and Housing Act (Cal. Gov. Code §12900 et. seq.).[1]

Expert testimony played a key role in the briefing and the court’s decision.  Plaintiffs attempted to use statistical evidence to establish there were common questions about the legality of pay and promotion decisions, and argued the claims were amenable to classwide treatment and common proof.  The court allowed Plaintiffs a second round of briefing after concluding they did not receive education, training, and performance-related data for their initial expert to include in his analysis.  In the supplemental round of briefing, however, Plaintiffs tendered a different expert who chose not to make use of the acquired data.

The trial court concluded that neither of Plaintiffs’ experts had appropriately grouped together similarly situated individuals across the entire putative classes.  A plaintiff does not state even a prima facie case of an EPA violation unless she can show that she was paid less than another employee of a different gender, race, or ethnicity for “substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions.”  Cal. Labor Code §§ 1197.5(a) (gender), (b) (race or ethnicity).  The court found that Plaintiffs failed to furnish evidence that could make that showing across the entire class.

Plaintiffs’ experts grouped individuals by EEO job group, which assigned Anthem’s greatly varied jobs into only 10 categories, with over 80% of individuals falling into just one EEO job group (office and clerical).  The EEOC web site itself describes this category broadly to include office and clerical work regardless of level of difficulty.  Both experts also ignored Anthem’s grouping of jobs into job families, which clustered jobs by function and responsibility and greatly narrowed the breadth of the groups.

The Court found Plaintiffs’ statistical models thus crucially rested on faulty assumptions by assuming those who shared an EEO job group were comparable.  To demonstrate, the court pointed to various Anthem jobs, vastly different in nature, which shared the same EEO job group.  For example, dental services analysists and office clerks were in the same EEO job group even though Anthem required dental services analysts to have a bachelor’s degree and two years of experience, while Anthem only required a high school diploma (and no prior experience) of office clerks.  The court also looked to market trends as evidence of the different pay typical of these vastly different positions, noting that market research data indicated that nationwide median pay was $47,900 for dental analysts but only $28,200 for clerks.  As another example, a nurse practitioner and accounting operations manager, earning $93,000 and $166,400 at Anthem, respectively, shared the same EEO job group and were treated as similarly situated in Plaintiffs’ models, even though one worked in the finance department and the other in the physicians’ and nurses’ department.  The court found the expert models did not properly analyze pay rates of putative class members and juxtapose those against employees who performed substantially similar work.  Thus, the court concluded it could not rely on Plaintiffs’ models to assess violations on a classwide basis but would instead have to make individualized inquires as to who were truly comparators under the EPA.

Aside from the problematic reliance on EEO groupings, the court also faulted Plaintiffs’ second expert on two additional grounds.  First, he only measured tenure by time at the company, rather than time in a position.  As Defendant’s expert pointed out, time in position is a more relevant tenure-related variable, because one would expect salary to increase over time in a position as the employee gained experience in that role.  Time in position was a statistically significant variable related to compensation in 7 of 10 years.  Conversely, Plaintiffs’ model measuring tenure by time since hire did not accurately capture one’s experience in a specific position, but instead conflated various positions held and ignored decreases that may have resulted from position changes. The court also found that Plaintiffs’ expert erred by including physician advisors earning over $180,000 in his model.  By contrast, Defendant’s expert deemed these individuals as outliers because their earnings were so vastly different from other non-exempt employees.  The Court found the exclusion of “time in position” and inclusion of physician advisors further evidenced that Plaintiffs’ experts’ “methodology would not provide a reasonable basis for his conclusion that racial discrimination exists at Blue Cross.”

Even ignoring the reliability problems, the court noted that Plaintiffs’ final statistical model showed no pattern of underpayment of women and no statistically significant disparity for five of the eleven years of the class period.  Defendant’s statistical model, on the other hand, controlling for Anthem job family to reflect similarly situated positions based on actual jobs, showed that there were no statistically significant disparities for 10 of the 11 years of the class period.  The court noted that Plaintiffs’ models—particularly when juxtaposed with Defendant’s more refined analysis—highlighted “the inherent problem in treating [the] case as a class action” because the evidence showed “individual [Anthem] job titles within [an EEO] Job Group can be vastly different.”  The court explained the upshot was that it would have to conduct highly individualized assessments of each member of the putative class to determine liability, and that Plaintiffs’ statistical models did nothing to cure the problem.

Significantly, the court noted that Plaintiffs failed to identify a single uniform policy that dictated pay and promotion decisions across the putative class.  The court noted that this failure further undermined the idea that there was any predominant common question amenable to common proof, related to whether Blue Cross had a policy of discriminating in pay and promotions.  In contrast, Blue Cross put forth evidence that it used race- and gender-neutral factors to develop its pay structure, including using market surveys to determine the median pay rates for its specific jobs and adjusting pay per geographic location.  The company also put forth evidence that managers had discretion to make individualized determinations when making pay decisions by considering the labor budget and pay equity among employees as well as the employee’s contributions, experience, and performance.  Plaintiffs’ failure to identify a specific employment practice in the face of Defendant’s evidence of race-and gender-neutral pay-setting policies, in the court’s view, underscored that the equal pay inquiry was highly individualized, and thus even a reliable regression model “would not be sufficient for a finding of predominance.”  Quoting the U.S. Supreme Court’s 2011 decision in Walmart Stores, Inc. v. Dukes, the Court noted that statistics alone are “insufficient to establish [Plaintiffs’] discrimination theory can be proved on a classwide basis.”

This case serves as a reminder that even under California’s EPA, one of the nation’s most employee-friendly equal pay statutes, plaintiffs cannot skirt the requirement that comparators must perform substantially similar work, when viewed as a composite of skill, effort, and responsibility, and performed under similar working conditions, and that poorly-constructed statistics are insufficient on their own to furnish common, classwide proof of discrimination.  Orrick will be tracking developments in this and other EPA cases and putative class actions.

[1] Plaintiffs also alleged unfair business practices violations (Cal. Bus. & Prof. Code §§ 17200 et. seq.).