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
Erin’s practice covers all aspects of employment law, as well as complex business litigation outside the employment context. Erin has successfully defended numerous class actions, EEOC systemic discrimination investigations, and complex individual cases involving claims of discrimination, harassment, retaliation, wrongful termination, and wage-and-hour claims. Erin has particular expertise in the area of pay equity, compensation analyses, and diversity initiatives; and regularly advises clients with respect to OFCCP and other EEO audits.
Erin also is an accomplished trial lawyer. She has tried several cases before juries and in arbitration, and has successfully has obtained numerous defense summary judgment rulings and other favorable resolutions in state and federal court.
Erin's clients include leading technology and Fortune 500 companies, including: Facebook, Oracle, Netflix, Pandora, Pinterest, NVIDIA, NetApp, Splunk, Morgan Stanley, Bank of America, Citigroup, and Seagate Technology.
Erin is currently the management program chair of the ABA Equal Employment Opportunity Committee, and frequently speaks on California and national employment law issues. She has published numerous articles on employment law in publications around the country, including the ABA Journal of Labor & Employment Law. She also provides training on managing within the law and preventing sexual harassment, and conducts internal investigations on employment-related matters.
Posts by: Erin Connell
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
As California goes, so goes the nation. When it comes to employment law, the Golden State is continuing down a path of increased regulation. With 2017 right around the corner, here are some new laws California employers must prepare for – all effective Jan. 1, 2017 unless otherwise stated: READ MORE
Earlier this year, we predicted that the Department of Labor’s Office of Federal Contract Compliance (“OFCCP”) would ramp up investigations directed at rooting out alleged discrimination by information technology companies. Many tech companies have indeed been the focus of increasingly intense and acrimonious investigations in 2016.
OFCCP took its enforcement efforts to the next level this week by filing a formal administrative complaint for violations of Executive Order 11246 (which prohibits discrimination by federal contractors). The complaint alleges that Palantir Technologies – a private software company headquartered in Palo Alto and recently valued at $20 billion – discriminated against Asian applicants for three positions (QA Engineer, Software Engineer, and QA Engineer Intern). Specifically, the OFCCP alleges that the company hired largely based on an employee referral system that resulted in statistically significant underrepresentation of Asian hires, given that the vast majority of applicants for these jobs were Asian. The complaint seeks to debar the company from future federal contracts and require “complete relief” for Asian applicants for these roles, including lost compensation, hiring, and retroactive seniority.
On May 18, 2016 the EEOC held a commission meeting to address the topic of promoting diverse and inclusive workplaces in the tech sector. Orrick’s Erin Connell was asked to testify at the meeting and provide examples of the types of diversity initiatives tech companies are using. Watch our blog for updates on workplace diversity and new developments in the equal pay space as they continue to unfold. Included below is the text of Erin’s testimony before the EEOC:
Plaintiff Lynne Coates filed a class action lawsuit against Farmers on April 29, 2015 alleging gender discrimination claims under Title VII and California’s Fair Employment and Housing Act, including violations of the federal and California equal pay acts and California’s Private Attorneys General Act. In this post on Orrick’s Equal Pay Pulse blog, Orrick attorneys Erin Connell, Allison Riechert Giese and Megan Lawson examine Coates v. Farmers and what it means for employers as well as future equal pay claims in California.