Why Pay Equity Issues Are Attracting Lawsuits

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In case you haven’t noticed, pay equity and gender bias have been hot topics of late. As the twin issues continue to wend their way around the country, corporate policies are being revised and state legislatures are introducing new measures. But do you know the extent to which such topics are producing litigation? 

Here’s why pay equity issues are attracting lawsuits.

The Issue

As the focus turns to narrowing the gender pay gap and as states enact laws covering equitable pay for a broader range of employees, human resources pros are reviewing their company’s policies and practices. 

Some 44 states have enacted pay equity laws since the federal Equal Pay Act of 1963 was signed into law. Nearly all such state laws require increased workplace transparency and protect workers from retaliation when they openly chitchat about their earnings. 

At the same time, there has been a wave of litigation and resulting media coverage related to allegations of gender bias and pay disparities — even as companies and some law firms face challenges in accurately examining their own compensation practices. 

State Actions

Many experts believe a lack of transparency exacerbates pay inequity because underpaid employees don’t know what other employees who are doing similar work are paid. What with social media and online forums, it’s difficult to keep pay confidential these days anyway. As a result, a burgeoning number of states now prohibit retaliation against workers who disclose their compensation to colleagues. 

What’s more, some states now prohibit prospective employers from forcing job applicants to tell them what they earned in their last position(s). The rationale is basically that such employer actions foster compensation inequalities because they can result in depressed starting salaries. In other words, the salary history approach will be flawed if a candidate’s previous employers were engaging in discriminatory compensation practices. 

Also Read: What are some of the advantages of using enterprise interface designers?

The Legal Realm

Somewhat ironically, legal issues surrounding pay equity are not exempt from the legal profession. News of litigation involving silk stocking law firms is reaching attorneys around the country as female partners, associates, and staff are making claims of gender bias and unequal compensation, sparking complex legal questions.

The law firms LeClairRyan, Jones Day, and Winston & Strawn, for example, are among those in the litigation mix. In one dustup, Winston & Strawn is battling to force a former female partner to submit to arbitration regarding her allegations of discrimination and anti-fair pay practice. The firm has appealed to the Supreme Court, challenging a California Court of Appeals decision in the partner’s favor.

Complex Legal Issues

Indeed, gender bias suits can bring forth complex legalities. For example, in a gender and pay discrimination case involving Jones Day, the request of some plaintiffs to remain anonymous for fear of retaliation was denied by a federal judge. Note, though, that such “Jane Doe” cases are only allowed by courts in exceptional cases.  

Corporate Culture

It’s a fact that the majority of bias and compensation suits are ultimately settled. 

However, the culture of some organizations can continue to promote pay inequities. For example, such culture can assume off the top that women are less valuable than men who essentially perform the same work. Actions organizations can take to improve the culture in this area include hiring independent monitors, collecting solid data on organization-wide compensation practices, and creating ways to resolve pay disputes.

Now you know why pay equity issues are attracting lawsuits. Such issues are often complex and unwieldy. However, they aren’t going anywhere anytime soon. The best thing you can do, for your organization and your employees, is to fairly assess your situation – then act right away. You’ll be so glad you did.

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