With the U.S. Department of Labor’s lawsuit against Google Inc. to obtain compensation data underway, the DOL has revealed that “systemic compensation disparities against women” exist at the tech giant. While Google denies the accusation, lawyers say the ongoing investigation highlights the increased pressure companies – and in-house lawyers – face to close the gender pay gap.
On Jan. 4, the DOL filed a complaint against Google, claiming the company denied its Office of Federal Contract Compliance Programs access to certain employee compensation records, which is required as part of a DOL compliance review. The Mountain View, California-based company did comply with an initial request for compensation data, but refused to produce requested additional information.
In a trial that began April 7 at the Office of Administrative Law Judges in San Francisco, DOL regional director Janette Wipper testified that Google has “systemic compensation disparities against women pretty much across the entire workforce.”
But Google has said this is not the case. “We vehemently disagree with Ms. Wipper’s claim,” a Google representative said in an emailed statement to Corporate Counsel. “Other than making an unfounded statement which we heard for the first time in court, the DOL hasn’t provided any data, or shared its methodology.”
The company also published a blog article Tuesday outlining Google’s “rigorous, annual analyses” of its pay practices, including compensation decisions that the company says are blind to gender and analysis to ensure no significant pay disparity based on gender, so that “pay practices remain aligned with [the] commitment to equal pay practices.”
There are clearly two very different sides of this issue, but Wipper’s statement seems unusual, said Jill Rosenberg, an employment law partner at Orrick, Herrington & Sutcliffe who has no involvement with Google’s dealings with the OFCCP. “I think the statement [Wipper] made has got to be an overstatement,” she said. Because at the initial stage of data requests, you wouldn’t typically find systemic discrimination, and if you did, additional data would likely not be needed, Rosenberg pointed out.
Rosenberg added that it’s not uncommon, especially in the tech industry, for companies to impose a self-analysis like Google’s. “Companies do look at their own data,” she said. “The spotlight has especially been shined on the tech industry, and I think for competitive reasons, as well as legal reasons, they have been looking at their own demographic.”
And that’s at least in part because there’s focus on pay equity coming from several directions. Shareholders are calling on companies to address gender pay gaps. Investment firm Arjuna Capital, for instance, has submitted shareholder proposals at companies such as Apple Inc., Microsoft Corp. and Intel Corp. asking the tech giants to show commitment to gender pay equity.
Arjuna targeted Google as well, but shareholders voted against the resolution last year. The issue is up for consideration again when Alphabet Inc., Google’s parent company, has its annual shareholder meeting on June 7.
Even when not successful, Rosenberg said these efforts have “led to a lot of companies on their own saying, ‘We will endeavor to study our numbers and if we have gaps, to try and remedy those.’”
In-house lawyers are “the first line of legal defense” when it comes to being proactive about gender pay equity, Rosenberg added, as they play an important role, for example, in highlighting where the risks are and aid in explaining the processes around doing an audit of the company’s workforce.
“There’s a challenge in how you do [an audit] legally and in a way so that if you get sued, you have privilege still,” she said. “Because you may have a human resources department say, ‘Let’s do a study,’ but not do it with privilege in mind.”
If a company has publicly made a commitment to gender pay equity, legal departments are also going to be “held to task” on the issue, said Michele Coleman Mayes, vice president, general counsel and secretary for the New York Public Library and chairwoman of the American Bar Association’s Commission on Women in the Profession. This means it’s necessary to not only look within the department, she said, but also to consider where and how money is spent on outside legal services.
States such as California, New York and Massachusetts are enacting their own equal pay statutes, further highlighting the gender pay gap, said Mayes. “Laws like these are starting to take hold,” she said, which has created “more of a focus on this [issue].”
Moreover, on both the state and federal levels, there’s a push to enable employees to discuss salary and to ensure that salary history is not used in the interview process, said Sarah Fleisch Fink, director of workplace policy and senior counsel at the National Partnership for Women & Families. Companies looking to root out pay discrepancies can learn from these efforts, Fink said, by “allowing employees to talk about their pay” and by “stopping the practice of relying on salary history information.”