On November 5, 2020, the Office of Federal Contract Compliance Programs (“OFCCP”) issued a final rule defining the evidentiary standards it will use for proving discrimination claims by federal contractors, revising the process for notifying contractors of potential violations, and outlining an option for contractors to participate in an “expedited” dispute resolution process. It will take effect on December 10, 2020. Notably, the rule deviates significantly from the version initially proposed by OFCCP on December 30, 2019, which relied far more heavily on statistics and came under intense scrutiny from the contractor community, including the U.S. Chamber of Commerce. According to OFCCP, the requirements laid out in the final rule will increase transparency and create clear parameters for contractor compliance with equal employment opportunity laws. READ MORE
On September 23, 2020 the Securities and Exchange Commission (“SEC”) adopted amendments to 17 C.F.R. § 240.14a-8 (“Rule 14a-8”), raising the bar for shareholders seeking to force votes on proposals. The rule comes on the heels of persistent and repeat shareholder proposals in various areas including, notably, pay gap data reporting.
On September 30, 2020, California Governor Gavin Newson signed SB 973, making California the first state to require employers to submit employee pay data by race and gender. As we previously reported, SB 973 is modeled after the now discontinued federal EEO-1 pay data collection form, which was harshly criticized for its heavy burden on employers and lack of utility in assessing for pay equity or pay discrimination (see prior Equal Pay Pulse blogs here, here, here, and here).
In the wake of the Black Lives Matter movement and a nationwide push towards greater equality, transparency and accountability, the California legislature this week passed a bill (SB 973) that would establish at the state level the equivalent of the EEOC’s discontinued EEO-1 pay data collection form. If signed by Governor Newsom, SB 973 would require that starting March 31, 2021 every California employer with 100 or more employees who files a federal EEO-1 report must annually submit a pay data report to the California Department of Fair Employment and Housing (“DFEH”) that discloses: (1) the number of employees by race, ethnicity, and sex in each of ten broad job categories, and (2) the number of employees by race, ethnicity, and sex whose annual earnings (defined as W-2 income) fall within each of the pay bands used by the United States Bureau of Labor Statistics in the Occupational Employment Statistics survey. Employers with multiple establishments must submit a consolidated report, as well as a report for each establishment. READ MORE
On July 16, the EEOC announced plans to fund an independent study to evaluate pay data submitted by employers for fiscal years 2017 and 2018 through Component 2 of the EEO-1 form, both to inform potential next steps for the data, as well as to guide any potential future collections. As we reported last March, after a tumultuous history, the EEOC decided against renewing its request for authorization to continue collecting pay data under Component 2 of the EEO-1 form, which reflected employees’ W-2 earnings and hours worked across broad job categories, broken down by gender, ethnicity, and race. The EEOC’s decision in March ended a four-year saga – including litigation – over whether the pay data collection would go forward at all. Much of the controversy stemmed from critiques that the burden and confidentiality concerns implicated by the Component 2 submissions outweighed any potential benefit, particularly given the form’s reliance on W-2 earnings (as opposed to base pay or total compensation awarded for work performed in a given year), combined with the breadth of the pay bands and job categories used, as well as the inability for most employers to accurately track or report hours worked by exempt employees (as we reported here, here, here, here, here, here, here, here, and here). Despite last March’s announcement, the EEOC has not stated whether or how it plans to use the data it already has collected. READ MORE
The federal Equal Pay Act (EPA) and its many state analogs require equal pay for equal (or, in some states, “substantially similar”) work. The EPA contains a so-called “catch-all” defense to equal pay claims, permitting wage differentials if employers can show that they are “based on any factor other than [protected category].” But this catch-all defense has been under scrutiny in courts and legislatures around the country. As we recently reported, an en banc Ninth Circuit rejected an employer’s argument that sole reliance on prior pay could be a “factor other than sex” within the meaning of the EPA. The Ninth Circuit’s finding is an outlier among circuit courts in this respect, but it fits a broader trend to narrow the “catch-all” affirmative defense, particularly at the state level. READ MORE
On Tuesday, May 12, 2020, the Ninth Circuit heard oral argument in Freyd v. University of Oregon. Jennifer Freyd, a professor of Psychology at the University of Oregon, filed a class action lawsuit in March 2017 alleging gender-based pay differences in violation of the Equal Pay Act, Title VII, and other statutes. Freyd asserted that the University paid her less than four male colleagues in her department and that the University’s retention award policy had a disproportionate impact on the University’s female psychology professors. In May 2019, the District Court granted Defendants’ motions for summary judgment, and Freyd subsequently appealed the decision to the Ninth Circuit Court of Appeals. READ MORE
A California district court dealt a blow to the U.S. Women’s National Team’s (WNT) equal pay case on May 1, granting partial summary judgment to the United States Soccer Federation (USSF) in the headline-grabbing case filed last year. The decision dismisses the team’s compensation discrimination claims under both the Equal Pay Act (EPA) and Title VII but mostly leaves intact the WNT’s remaining discriminatory working conditions claims. We previously blogged about the case here.
The State of New Jersey’s Division on Civil Rights (“DCR”) recently issued new Guidance on the Diane B. Allen Equal Pay Act (“EPA”). The EPA, which took effect July 1, 2018, was already the most sweeping equal pay legislation in the nation by strengthening already existing equal pay protections found in the New Jersey Law Against Discrimination (“LAD”). As Governor Murphy announced on March 2, 2020, the Guidance goes even further and “make[s] clear our intentions to eliminate discriminatory pay practices in the Garden State that have historically prevented women and other marginalized groups from earning their fair share.” READ MORE