JPMorgan Loses Another Ruling in Labor Department's Gender Pay Discrimination Case
Lawyers for JPMorgan, represented by McGuireWoods, argued that the Labor Department waited too long to tell the bank about alleged gender-based compensation allegations. An administrative law judge ruled for labor enforcers.
May 09, 2018 at 01:49 PM
4 minute read
The original version of this story was published on National Law Journal
A federal administrative judge on Tuesday, ruling against JPMorgan Chase & Co., declined a procedural invitation from the bank to strike down U.S. Labor Department claims that compensation practices discriminated against women.
Lawyers for JPMorgan, represented by McGuireWoods, argued that the Labor Department waited too long to tell the bank about alleged gender-based compensation allegations. Records show labor regulators notified the bank in March 2015 about alleged compensation discrimination against women in certain posts.
The Labor Department's Office of Federal Contract Compliance Programs (OFCCP) told JPMorgan CEO Jamie Dimon that year that the bank “has discriminated against 94 qualified females in their compensation because of their gender.” The notice, citing data from 2012, was rooted in a routine compliance evaluation of JPMorgan as a federal contractor.
The bank's attorneys urged Timothy McGrath, a Labor Department administrative law judge, to find that the agency's claims were out of bounds because the bank was “not put on notice of the OFCCP's allegations of discrimination until more than 1,000 days after the day on which the alleged discrimination took place.”
The Labor Department filed its administrative complaint against JPMorgan in January 2017 in the waning days of the Obama administration. The case, one of several big actions that was brought before the Trump administration took over, is unfolding at a time of increasing scrutiny on compensation practices and workplace culture at major U.S. companies.
The McGuireWoods team, led by William Doyle Jr., argued that federal civil rights law requires that an enforcement action be filed within 180 or 300 days of an alleged unlawful employment practice.
“OFCCP's position that Congress implicitly gave it vastly broader and unlimited powers that Congress expressly withheld from EEOC based on its expressed concern about timely notice to the employer of allegations of discrimination, is nonsensical as an interpretive doctrine,” JPMorgan's lawyers wrote in a filing.
Doyle, a partner in McGuireWoods' Raleigh, North Carolina, office was not immediately reached for comment Wednesday. A former deputy director of the Labor Department's contract compliance office, Doyle joined the firm in 2015.
Labor Department attorneys argued that the administrative complaint and the notice of the alleged compensation discrimination were timely. Agency attorneys said Title VII's time limits do not apply to OFCCP's actions arising from compliance audits. “[T]here is no relevant time limit for OFCCP,” Labor Department lawyers Anna Bennett and Alexander Kondo said in a filing in the case in March 2017.
Lawyers for the bank have called the Labor Department's claims “unfounded” and “conclusory,” and argued that the evidence the agency presented failed “to state a plausible claim of systemic discrimination” against women.
“The administrative complaint alleges no facts related to the work performed, responsibility level, skills and qualifications or the other relevant factors that could possibly establish that the employees compared are similarly situated,” JPMorgan's lawyers wrote in a filing in February 2017. The attorneys contend the Labor Department “has failed to identify any specific employment practice that allegedly caused a disparate impact in pay.”
The Labor Department said in its complaint that JPMorgan “continues to fall short of its obligations, compensating a group of female employees significantly less than their male counterparts and thereby failing to eliminate sex discrimination from its compensation process.”
Labor enforcers proposed corrective action that included JPMorgan's evaluation of compensation systems “to determine whether and where impediments to equal opportunity exist, including analyzing all impediments that result in gender-based and race-based disparities.”
A Labor Department lawyer involved in the JPMorgan case was not immediately reached for comment Wednesday, and an agency spokesperson declined to comment on the pending litigation. The Trump-appointed Labor Department solicitor, Kate O'Scannlain, a former Kirkland & Ellis partner in Washington, now oversees all of the agency's litigation.
JPMorgan recently renewed its effort to dismiss the agency's administrative complaint, according to a docket entry posted on May 4. Last year, a Labor Department appellate panel ruled against an earlier effort from JPMorgan to shut down the case.
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