The OFCCP Continues to Crack Down on Pay Discrimination
This article by Gentry Locke attorneys Lindsey Coley and Brad Tobias was published by Law360 on February 8, 2017. You may read the formatted article here.
In the waning days of President Obama’s administration, before President Trump was inaugurated on January 20, 2017, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) forged several new lawsuits against technology and financial companies in a continuing effort to crack down on compensation discrimination. The OFCCP, which is expected to take a more employer-friendly approach under the Trump Administration, still has yet to have a new director appointed. But for now, the OFCCP, headed by interim acting director Tom Dowd, has several high-profile lawsuits against large corporations for their practices involving compensation.
Google Sued for Refusal to Submit Compensation Data
In its first signal of strength in the new year, on January 4, 2017, the OFCCP filed a lawsuit against the tech mega-giant Google for its refusal to submit compensation data for its employees as part of a compliance review. The OFCCP alleges that Google repeatedly refused to provide specific compensation data about its employees.
The request for compensation data, which was issued by the OFCCP under Executive Order 11246, asks Google to provide job and salary history for employees which includes a variety of employee-specific data, including “starting salary, starting position, starting ‘compara-ratio,’ starting job code, starting job family, starting job level, starting organization” and any changes to these figures that the employees had experienced in 2014 and 2015. It also requests that Google be ordered to turn over names and contact information for these employees. The OFCCP’s lawsuit alleges that Google refused to voluntarily provide this information on several occasions and now the agency seeks an order compelling Google to turn over the compensation data.
The OFCCP authority to compel Google and other covered federal contractors to provide compensation data for its employees emanates from Executive Order 11246, an executive order which prohibits pay discrimination by federal contractors. The OFCCP alleged that it had at least one contract with the federal government covered under the Executive Order, specifically noting that since June, 2014, Google had received on one contract in excess of $600,000 from the federal government.
OFCCP Sues Oracle Alleging Gender and National Origin Discrimination
Less than two weeks after its suit against Google, on January 17, 2016 the OFCCP filed a lawsuit against computer technology giant Oracle, alleging that the company had engaged in a systematic practice of compensation discrimination. The OFCCP claims that Oracle had a practice of paying white male workers more than their counterparts, which included female, African-American, and Asian employees. Furthermore, the OFCCP alleges that Oracle systematically favored Asian workers in its recruiting and hiring practices for product development and other technical roles, which resulted in hiring discrimination against non-Asian applicants.
The allegations in the complaint stem from the OFCCP’s investigation of Oracle, which began in 2014. Like Google, the OFCCP alleges that Oracle had repeatedly refused to comply with the agency’s request for compensation data, which included “prior-year compensation data for all employees, complete hiring data for certain business lines, and employee complaints of discrimination.”
It should be noted that these lawsuits aren’t the OFCCP’s first crack at the tech industry, as recently the DOL has been engaged in enforcement efforts over several technology companies in Silicon Valley and around the country. In October 2016, the OFCCP filed a lawsuit against a Massachusetts technology manufacturer, Analogic, alleging that its compensation policies resulted in systemic discrimination against women in certain positions. Just one month prior, the agency filed a lawsuit against Palantir Technologies in Silicon Valley accusing the company of systematically discriminating against Asian job applicants.
OFCCP Sues Largest Bank in the United States for Wage Discrimination Based on Gender
One day after filing suit against Oracle, the OFCCP took on JPMorgan Chase & Co., the largest bank in the United States, for its compensation practices. The OFCCP alleges that JPMorgan is not in compliance with its affirmative action obligations and is falling short of its obligations as to compensation equality between the sexes.
With respect to compensation discrimination, the OFCCP alleges that JPMorgan had, since May of 2012, discriminated against female employees in the bank’s unit identified as its “Investment Bank, Technology & Market Strategies.” The lawsuit claims that the bank discriminated against at least 93 females in this unit, who had been paid less than comparable males even after adjusting for differences in legitimate compensation-determining factors.
The OFCCP also alleges that JPMorgan had not been meeting its obligations in maintaining an Affirmative Action Plan pursuant to Section 202 of Executive Order 11246. Specifically, the OFCCP claims that JPMorgan failed to perform in-depth analyses of its total employment processes to determine whether and where impediments to equal opportunity exist, and that the bank had failed to develop and implement an auditing system to periodically measure the effectiveness of its total affirmative action program. The lawsuit against the megabank seeks an injunction to prevent it from further discriminating against female employees in compensation, as well as requiring it to identify and provide complete relief to the affected 93 employees, including lost wages, interest, salary adjustments, fringe benefits, and all other lost benefits of employment.
LexisNexis Risk Solutions to Pay Over $1.2M Resulting from OFCCP Determination of Pay Discrimination
LexisNexis Risk Solutions, the computer-assisted legal research service, will pay over $1.2 million to resolve systemic pay discrimination against women. After conducting two separate compliance investigations of the company’s locations in Georgia and Florida, the OFCCP concluded that over 200 female employees were adversely impacted as a result of the company’s pay practices. Although LexisNexis did not admit liability, it entered into a settlement agreement with the OFCCP in January 2017 under which it agreed to pay $1.2 million in back pay and interest and $45,000 in salary adjustments, as well as to monitor compensation practices that could impact women.
In the waning months of the Obama Administration, it was clear that rooting out compensation discrimination continued to be an important area of focus. In 2016, the Obama Administration unveiled several new initiatives in this regard. For example, the Equal Employment Opportunity Commission (EEOC) announced that the EEO-1 report will be revised to include expanded information on pay data and hours worked beginning with the 2017 report, which will be due on March 31, 2018.
It remains to be seen whether the Trump Administration will continue to press forward with this compensation initiative. The most recent OFCCP Director in the Obama Administration, Pat Shiu, left the office in the days following the election. These new actions against these large technology and financial companies have been brought under the helm of Interim Acting Director Tom Dowd, who is still serving in this capacity. The Trump Administration, including the new Department of Labor Secretary, will have the power to shake up the agency and the direction it takes with enforcement. It is likely that pay equity will remain a priority under the Trump Administration.
As the Trump Administration takes hold in the new year, Gentry Locke will continue to track developments in the policies of the OFCCP and DOL as they unfold. If you have any questions about government contract issues or any other employment issues, please contact one of the members of Gentry Locke’s Employment Law Team.