Court Revives Pay-Equity Class Action Against Google

Female workers allege companywide practice resulting in pay discrimination

LIKE SAVE

A group of women who worked for Google in California can proceed with their class-action complaint asserting that the tech giant discriminated against female workers by paying them less than their male co-workers.

The lawsuit stems from pay data that Google reported to the U.S. government, explained Jim Evans, an attorney with Alston & Bird in Los Angeles. The plaintiffs alleged that Google violated the California Equal Pay Act by tying starting salaries to job candidates' prior compensation and placing women in lower-paying job classes.

Since women historically have been paid less than men, Google systematically paid female employees at lower rates than it paid male employees for substantially similar work under similar working conditions, according to the complaint.

California law now prohibits employers from asking job applicants about their prior pay, but the lawsuit was filed in 2017, before the ban took effect.

[SHRM members-only toolkit: Complying with California Wage Payment and Hours of Work Laws]

Employers can reduce the risk of similar lawsuits by changing their hiring practices to remove salary-history questions from job applications and interviews, said Miranda Watkins, an attorney with Fisher Phillips in San Diego. Employers should also inform third parties, such as recruiters, about any changes to policies and procedures concerning prior salary history.

Second Chance

Three former Google employees (a software engineer, business systems manager and sales specialist) filed the class-action complaint in 2017. The California Superior Court initially dismissed the complaint—which attempted to cover all women employed by Google in California—because it was too broad and insufficiently pled. But the court gave the plaintiffs an opportunity to amend the complaint.

In the amended complaint, the plaintiffs argued that Google had a companywide policy of basing starting salary in part on past compensation, which perpetuated historic pay disparity. The plaintiffs identified 30 job titles in six job families that would be covered in the class action.

"That was enough for the California court to conclude, at least at the pleading stage, that common issues would predominate over individualized issues," according to a client alert from law firm Seyfarth Shaw. But the plaintiffs "may ultimately fail to maintain their case as a class action when it is subjected to more searching scrutiny at the class certification stage."

The 9th U.S. Circuit Court of Appeals, which covers California, recently ruled that a job applicant's prior salary can't be used to justify wage differences between male and female employees under the federal Equal Pay Act. The Society for Human Resource Management (SHRM) "asserts that salary history should not be a factor in setting compensation," according to SHRM's April 2018 statement on pay equity. Instead, "compensation decisions should be based on the value of the position to the organization, competition in the market and other bona fide business factors." But SHRM's statement added that employers should be able to discuss pay expectations or provide the pay range for the position sought.

Although that case concerned federal law, the decision may affect Google's defense in its California case. "I would expect plaintiffs' counsel to rely on this ruling in attacking Google's justification of its compensation structure," Watkins said. "However, I would expect Google to argue that the language of the California Equal Pay Act, which is the basis of the suit against them, implies that prior salary history could be one factor, just not the sole factor, in setting employee compensation."

The federal Equal Pay Act and California's law have other differences, too. While the federal law requires employers to provide women and men with equal pay for equal work, California's law is more expansive. It was amended in 2016 to require fair pay for men and women who perform "substantially similar work, when viewed as a composite of skill, effort, and responsibility." Prohibitions on basing pay differences on race or ethnicity were added in 2017.

Key Takeaways

The California Superior Court's decision to allow the Google case to move forward demonstrates the increased scrutiny on equal pay that companies face, Evans said.

Employers should work with counsel to conduct pay audits to determine if compensation gaps exist to get ahead of any potential lawsuits, including class actions like the current Google case, Watkins noted.

Furthermore, in California, employers must look at pay equity across locations and comparable jobs, even if workers don't have the same job title or aren't in the same job class.

"Know your workforce," Evans said. "Make sure hiring managers are communicating with one another so that they know what other managers are offering for a particular position."

The case is Ellis v. Google Inc., Cal. Sup. Ct., CGC-17-561299 (original complaint filed Sept. 14, 2017).

 

Was this article useful? SHRM offers thousands of tools, templates and other exclusive member benefits, including compliance updates, sample policies, HR expert advice, education discounts, a growing online member community and much more. Join/Renew Now and let SHRM help you work smarter.

LIKE SAVE

Job Finder

Find an HR Job Near You
Search Jobs
Post a Job

MEMBER BENEFITS

The SHRM Member Discounts program provides member-only access to discounts on products and services you can apply to your life and career, and share with your company.

The SHRM Member Discounts program provides member-only access to discounts on products and services you can apply to your life and career, and share with your company.

LEARN MORE

SPONSOR OFFERS

Find the Right Vendor for Your HR Needs

SHRM’s HR Vendor Directory contains over 10,000 companies

Search & Connect
temp_image