Santa Clara, CAIn late 2018, R. Ross and C. Rogus filed a class action California unpaid wages lawsuit against Hewlett-Packard Enterprise (HPE) that describes a pattern of gender-based pay discrimination. It’s hardly news, you think, that tech giants underpay women.
But what may be most important about the lawsuit is the pervasiveness and typicality of the illegal behavior described in the Complaint.
Three issues jump out:
• how wage history perpetrates discrimination;
• how employer policies that discourage employees from talking about salary prevent them from learning that they have been the victims of discrimination prohibited under California’s Equal Pay Act; and
• how secret wage classification and promotion systems make meaningful reform easy to avoid.
The Ugly Facts about Pay Discrimination
Ms. Ross went to work for Hewlett-Packard (HPE’s corporate predecessor) in 2001. She began as a business analyst and eventually became Director of Sales Operations. In the latter position, she had access to salary information that indicated that the base pay of male employees who joined HPE exceeded the base pay of female employees who joined around the same time, including female employees who had more extensive work experience at HPE. When she left the company in 2018, a superior told her that she was underpaid compared to male peers.
Ms. Rogus joined H-P in 2013 and, after the company’s reorganization, went to work for HPE as an Implementation Project Manager. Following the death of her Project Manager, she was asked to take on those increased duties. She understood that her title and compensation would be adjusted to reflect her new responsibilities. However, she received only a 2 percent performance-based raise. Her title was never changed, nor was she ever paid what her male Project Manager had been paid.
These are not isolated facts. In this California unpaid wages lawsuit, HPE is accused of systematically paying its female employees less than similarly situated males and failing to advance them at the same rate as male employees performing similar work. These practices allegedly exist throughout California and are possible because of preexisting practices.
Salary History
Since January 1, 2018, California employers have been prohibited from asking job applicants about salary history or using that information to determine what salary to offer a new employee. The goal is to short-circuit the continuing effects of past salary discrimination.
The law does not address the situation of workers hired before that date, however, or current employees seeking internal promotions. As currently drafted, it may not really help long-term workers who have made a career with a single employer. The Complaint alleges that long-term employees of HPE tend to remain at a the lower-paid job level 1 or 2, in contrast to new hires who start at or quickly rise to a better paid level 3.
Raises at HPE perpetuate and widen the gender pay gap because they are based on a percentage of the employees’ existing HPE salary. The longer a woman works at HPE, the less she is paid compared to similarly situated men, even men performing substantially equal or similar work in the same job. This is a place where the ill effects of gender discrimination combine with the ill effects of age discrimination to leave long-term female employees at a double disadvantage.
Pay Secrecy
It remains a common practice, especially in the tech industry for employers to discourage employees from discussing salary with their co-workers.
HPE’s website reportedly advises employees, “Don’t compare yourselves to your co-workers. Your compensation should be about you and your performance. By talking about your co-workers, you detract from that point. Don't start the discussion by telling your boss “I know Gary makes X more dollars than me.”
Policies that require silence about pay have been prohibited by the National Labor Relations Act in most industries since 1935.
California Labor Code section 232 also bans pay secrecy policies and employer discipline based on disclosure. Since 1985, the law has specifically prohibited requiring an employee to refrain from disclosing his or her wages; requiring an employee to waive the right to disclose his or her wages; and discharging, formally disciplining, or otherwise discriminating against an employee who discloses the amount of his or her wages.
Many employees are likely unaware of their rights or fearful of the consequences of being labeled a “troublemaker,” but the consequences of a culture of pay secrecy are far reaching. Employees cannot enforce their rights if they are unaware that they have been the victims of illegal policies. Many will remember that Lily Ledbetter, for whom the Lilly Ledbetter Fair Pay Act of 2009 was named, was precluded from pursuing a remedy for pay discrimination through the court system, because the statute of limitations had elapsed. Finally, workers cannot organize collectively around pay issues if they cannot share information without fear of retaliation.
Opaque Wage and Promotion Structures
If workers are prevented from acting because they are reluctant to share information among themselves, they are doubly harmed by opaque employer pay scales.
HPE has common, companywide policies and practices for setting compensation that applied to all HPE employees in California, male and female. These policies and practices, however facially uniform, do not result in equal pay for women and men for two reasons: the range of salaries paid for a particular job level is very wide and each job level may contain many more specific salary bands.
HPE does not publicly disclose its pay-grade or job level structure. But women predominate in less-well paid jobs. Even within the better-paid job classifications, they allegedly tend to find themselves in the lower salary bands.
Women who work for HPE in California are far from alone in suffering the effects of gender-based pay discrimination. But until legal enforcement mechanisms take on the underlying practices that make it possible, the best solution may be litigation.
If you or a loved one have suffered losses in this case, please click the link below and your complaint will be sent to an employment law lawyer who may evaluate your California Unpaid Wages claim at no cost or obligation.