Michael S. Powers

Michael S. Powers Associate

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Department of Labor Accuses Google of “Extreme” Systemic Gender Pay Discrimination

Image is extremely important in any business, and that is certainly true for high-profile businesses in the tech sector.  Large technology companies invest massively to groom images that typically include not only technological innovation, but also diversity and equality.  Portraying an image of diversity, equality, and openness can be seen as representing forward-thinking ideals.  In keeping with those ideals, Google recently tweeted that it had “closed the gender pay gap” for its employees.  The implication was that it had corrected any pay disparity between its male and female employees.  The company must not have been pleased then when later the same week, the U.S. Department of Labor (DOL) alleged that the company has not closed that gap, but rather has engaged in “extreme” pay disparity practices at the expense of its female employees.

The claims first surfaced in The Guardian newspaper, which reported on a hearing recently held at the offices of the DOL’s administrative law judges.  The Guardian reported that Janette Wipper, the DOL’s Regional Director for the Office of Federal Contract Compliance Programs (OFCCP), stated that Google was guilty of “systemic compensation disparities against women pretty much across the entire workforce.”  Days later, DOL Regional Solicitor Janet Herold confirmed Wipper’s statements, adding the agency had “received compelling evidence of very significant discrimination against women in the most common positions at Google headquarters.”

Google issued a statement “vehemently” denying the agency’s claims. Google’s Vice President of People Operations, Eileen Naughton, acknowledged that pay equality was a major issue in all industries, not only the tech industry, but stated that Google “conducts rigorous, annual analyses so that our pay practices remain aligned with our commitment to equal pay practices.”  Google’s steadfast claim that it has analyzed its pay data and found no pay disparity could not be more at odds with the DOL’s allegations.  Clearly, here must not only be wrong, but must have missed the mark quite badly.

These comments are the latest moves in an ongoing quarrel between Google and the DOL regarding access to the company’s pay data.  The dispute began with a 2015 audit by the OFCCP. Because Google contracts with the federal government to provide services in excess of $10,000 annually, it must comply with certain OFCCP regulations, including equal employment requirements prohibiting discrimination.  During President Obama’s eight years in office, he took several steps to address what he described as systemic gender pay imbalances, including such measures as prohibiting pay secrecy policies amongst OFCCP contractors and signing the Lily Ledbetter Equal Pay Act.  The Ledbetter Act is broader in scope, in that it is not limited to federal contractors, but rather amends the Civil Rights Act of 1964 to prohibit discriminatory payment practices or decisions.  In 2016, then-President Obama signed an executive order increasing the scope of OFCCP audits to include access to gender pay data.

For its part, Google has not disputed the authority of the OFCCP or the applicability of its anti-discrimination provisions.  Rather, the company has objected to particular requests as being “overly broad” and not relevant.  Google objected to the requests throughout 2016, and in January of 2017 the DOL filed suit in U.S. District Court for the Northern District of California.  In response, Google has argued that the employee names and contact information sought are not relevant and that it would be unduly burdensome to require the company to provide the data.  The DOL moved for summary judgment in the case earlier this year, but the Court denied the motion.  On April 7, 2017, the DOL asked the judge to compel Google to produce the documents and information sought.  The matter will now be argued before the Court.  It will then be up to the Court to decide whether the DOL overreached or whether it is entitled to the information it seeks as a part of its audit powers.  The outcome could have important consequences for employers in the future with regard to exactly how much access they are required to provide during OFCCP or other similar DOL audits.  It will also be interesting to see whether the DOL is correct about its claims of systemic discrimination with regards to compensation, or whether it has perhaps oversold that argument in an attempt to access the information it desires.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters, including regulatory compliance and Department of Labor litigation matters, for almost sixty years, and are available to discuss these issues and others.  As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.

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