Discrimination

“Judges Are Appointed For Life, Not For Eternity”: SCOTUS Rules That Judge’s Vote in Equal Pay Case Does Not Count Due To Judge’s Passing

In April 2018, an en banc Ninth Circuit held in Rizo v. Yovino that an employer cannot justify a wage differential between male and female employees under the Equal Pay Act by relying on prior salary. Before the Ninth Circuit published its decision, though, Judge Stephen Reinhardt passed away. On February 25th, the U.S. Supreme Court vacated the Ninth Circuit’s decision, reasoning that the appellate court should not have counted Reinhardt’s vote because he passed away before the decision was issued. Instead, the Ninth Circuit should not have released the opinion. READ MORE

New York City: Employment Actions Based On Hairstyle May Be Unlawful Race Discrimination

On February 18, 2019, the New York City Commission on Human Rights (NYCCHR) announced new enforcement guidance deeming certain actions taken based on an individual’s hair or hairstyle – whether at work, at school, or in public spaces – a form of racial discrimination. READ MORE

New York State and New York City Ring in the New Year With More Gender Protections

Last year, in the immediate aftermath of the #MeToo movement, both New York State and New York City passed sweeping legislation that sought to provide additional protections for individuals from sexual harassment (see our prior blog posts here). Perhaps most notable was legislation requiring all New York State employers to adopt a sexual harassment prevention policy by October 2018 and to conduct annual sexual harassment prevention training beginning no later than October 2019, among other things. Neither the State nor City legislatures appear to be slowing down – already this year, both have enacted additional worker protections. READ MORE

Say It Again: No Common Question Binds a Class Subject to Thousands of Individualized Pay Decisions

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

Does Title VII Protect Gay & Transgender Employees? The Supreme Court May Soon Decide.

As early as November 30, 2018, the U.S. Supreme Court will decide whether to hear three high profile employment cases that question whether Title VII’s ban on sex discrimination protects gay and transgender employees.  These cases have significant implications on the proper scope of Title VII and the rights of the LGBT community in the workplace.

Under Title VII, an employer has engaged in “‘impermissible consideration of … sex … in employment practices’ when ‘sex … was a motivating factor for any employment practice,’ irrespective of whether the employer was also motivated by ‘other factors’.”

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Tech Giants Continue To Face The Equal Pay Litigation Spotlight

In recent years, the volume of equal pay lawsuits has continued to increase in Silicon Valley, despite technology companies reaffirming their commitment to equal pay policies and practices. Earlier this month, Hewlett Packard Enterprise Co. (“HP”) was hit with the latest equal pay lawsuit. The class action lawsuit, filed in Santa Clara Superior Court, alleges that HP discriminated against its female workers by paying them less than their male counterparts and funneling women into certain jobs based on stereotypes. READ MORE

NY Harassment Update: NYS Releases Sexual Harassment Prevention Training Videos and NYC Releases Sexual Harassment Prevention FAQs

Late last month, the New York State Department of Labor released model sexual harassment prevention training videos that employers can use to train their employees, available here. While a welcome development, the videos alone do not fully comply with the State’s requirement that sexual harassment prevention training be “interactive” – employers must ensure that employees have the ability to ask questions and receive answers to their questions. The New York City Commission on Human Rights has also provided some new and welcome guidance to employers, releasing FAQs regarding NYC’s new sexual harassment prevention laws, available here. The FAQs primarily address which employers must conduct sexual harassment prevention training and how to calculate an employer’s number of employees for purposes of determining whether the employer is subject to the training requirements. 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.

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

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.).