In yet another development in the closely watched case of Rizo v. Yovino, the en banc Ninth Circuit ruled that employers may not defeat a plaintiff’s prima facie case under the Equal Pay Act (EPA) by arguing prior pay is a “factor other than sex” within the meaning of the statute. By doing so, the Ninth Circuit reaches the same result as the previous opinion penned by the late Judge Stephen Reinhardt before his passing in 2018, including overruling Kouba v. Allstate, a prior Ninth Circuit opinion that held that prior pay could justify pay differentials in combination with other factors, and if relied upon reasonably and to effectuate a business policy. The majority opinion further holds that as a matter of statutory interpretation, a “factor other than sex” within the meaning of the EPA must be “job related,” yet it also makes clear that the EPA does not prohibit employers from considering prior pay in making starting pay offers (and in this regard differentiates the opinion from California’s salary history ban). Two separate concurring opinions agree with the result, but they criticize the majority opinion for giving too narrow a reading of the EPA’s fourth “catch all” defense and for embracing a view of prior pay that puts the Ninth Circuit at odds with other circuits and guidance from the U.S. Equal Employment Opportunity Commission (EEOC). READ MORE
Erin M. Connell, Co-chair of Orrick's EEO & OFCCP Compliance Group and Pay Equity Task Force, represents employers in high stakes employment litigation and is a leader in equal employment opportunity law, pay equity, and OFCCP compliance.
Erin's practice covers all aspects of employment law. She defends employers in class actions and other complex cases, as well as in systemic investigations and audits by the EEOC, OFCCP, and the California CRD. Erin has led dozens of internal pay equity analyses and is a trusted advisor for several of the nation's most prominent employers on developing areas of employment law, including pay equity and pay transparency, DEI best practices, and the use of AI in employment decision making.
Erin also is an accomplished first chair trial lawyer. She has tried several cases before juries and in arbitration, and has obtained numerous defense summary judgment rulings and other favorable resolutions in state and federal court. Erin led the trial team that obtained a complete dismissal for Oracle in OFCCP v. Oracle, the largest pay equity case ever brought by OFCCP, which garnered national media attention and earned Erin recognition as a "Litigator of the Week" by the American Lawyer and a 2021 Employment MVP by Law360. As lead counsel, Erin also successfully obtained decertification in a statewide California pay equity class action, Jewett v. Oracle.
Erin's clients include leading technology and Fortune 500 companies, including: Oracle, Meta, Microsoft, Netflix, Pinterest, Twitter, Workday, PayPal, Sony Interactive Entertainment, NVIDIA, Airbnb, SiriusXM, Dropbox, Amgen, Zendesk, Splunk and Goldman Sachs.
Erin is currently a member of the Board of Directors of the Bar Association of San Francisco, a faculty member with the Institute for Workplace Equality (IWE), and frequently speaks on California and national employment law issues, including for IWE, the ABA, the Practicing Law Institute (PLI) and the American Employment Legal Council (AELC). She was formerly the management chair of the ABA Equal Employment Opportunity Committee. She has published numerous articles on employment law in publications around the country, including the ABA Journal of Law & Employment Law. She also provides employment law training and conducts internal investigations on employment-related matters.
Posts by: Erin Connell
Last week, U.S. District Court Judge Tanya S. Chutkan ruled that the EEOC may not discontinue its pay data collection efforts on November 11, 2019, but rather, must continue its collection efforts until it has collected from at least 98.3% of eligible reporters and must make all efforts to do so by January 31, 2020. The ruling is the latest in a lengthy saga regarding whether EEO-1 Component 2 pay data (data on employees’ W-2 earnings and hours worked across broad job categories, and broken down by ethnicity, race, and sex) would be collected—a saga that began with the Office of Management and Budget staying collection efforts, and culminated last Spring when Judge Chutkan ruled the decision to stay the collection lacked the reasoned explanation required by the Administrative Procedure Act (see overview here). After vacating the stay, Judge Chutkan initially set the deadline for data collection for May 31, 2019, but later extended it to September 30, 2019. READ MORE
The EEOC has been ordered to collect employers’ EEO-1 Component 2 pay data by September 30, 2019. The D.C. District Court issued the order after finding back in March 2019 that Office of Management and Budget (OMB’s) decision to stay the collection of Component 2 pay data lacked the reasoned explanation required by the Administrative Procedure Act. See our prior blog posts here, here, and here about National Women’s Law Center v. Office of Management and Budget, No. 17-cv-2458 (TSC) (D.D.C.). Since then the court has been critical of the EEOC’s compliance with its order, and held a status conference and a hearing in March and April. READ MORE
Uncertainty continues for the EEOC’s attempt to expand the collection of employers’ pay data. Last Monday, the D.C. District Court in National Women’s Law Center v. Office of Management and Budget, No. 17-cv-2458 (TSC) (D.D.C. Mar. 4, 2019), reinstated the EEOC’s revised EEO-1 form that increases employers’ obligation to collect and submit pay data. READ MORE
Echoing an increasingly familiar refrain, another district court has declined to certify a class of women bringing pay equity claims on the basis that they did not present a common question capable of producing a common answer to “the crucial question why was I disfavored.” Relying largely upon Wal-Mart Stores, Inc. v. Dukes, the court found certification inappropriate because the putative class members were subject to countless independent decisions involving the judgment and discretion of individual managers. The case also serves as another reminder that courts (including California state courts) will not accept an overly simplistic analysis comparing broad job categories or titles, but will continue to look at actual business practices and job responsibilities to ensure comparators are “similarly situated” so a meaningful pay comparison can be made. READ MORE
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.).
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.
 Plaintiffs also alleged unfair business practices violations (Cal. Bus. & Prof. Code §§ 17200 et. seq.).
In a highly anticipated move, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) issued its new compensation directive on August 24, 2018. Directive (DIR) 2018-05, Analysis of Contractor Compensation Practices During a Compliance Evaluation, replaces the Obama-era compensation guidance DIR 2013-03, Procedures for Reviewing Contractor Compensation Systems and Practices (referred to as Directive 307). OFCCP also included a list of 22 Frequently Asked Questions (FAQs) with DIR 2018-05. READ MORE
In the wake of #MeToo, California has enacted a new statute aimed to protect victims, witnesses, and former employers from claims of defamation for making complaints or communicating information about alleged sexual harassers to others. On July 9, 2018, Governor Brown signed into law Assembly Bill 2770. The bill amends Civil Code section 47, which makes certain communications “privileged,” meaning those communications cannot be the basis of a defamation claim.
The Office of Federal Contractor Compliance Programs (“OFCCP”) may soon rescind Directive 307, OFCCP’s current official statement as to how it conducts federal contractor compensation system reviews, according to a story published by Bloomberg Law on April 19, 2018. This announcement comes on the heels of Directive 2018-01, issued by the OFCCP on February 27, 2018, which mandates the use of Predetermination Notices (“PDN”) prior to issuing a Notice of Violation (“NOV”), and further requires national office oversight and approval before a PDN is issued. OFCCP notes that Directive 2018-01 is consistent with the agency’s focus to increase transparency about preliminary findings with contractors, and encourage communication throughout the compliance evaluation process. Combined, these two developments illustrate that change is afoot at OFCCP, now that new leadership is in place in Washington. READ MORE
In the last several weeks, allegations of rampant sexual harassment have shocked the collective conscience. With the assistance of social media, what started as an allegation against a Hollywood mogul snowballed into a nation-wide conversation about sexual harassment in the workplace and elsewhere. According to the Washington Post, hundreds of thousands of men and women took to Twitter and Facebook to express they had been victims of sexual harassment, many of them using the hashtag “MeToo” to show solidarity with other victims. READ MORE