The opinions expressed in entries in the LC Blog are those of the author, not of Lawyers Club of San Diego.
Is Pay Secrecy the Enemy?
Equal pay for women has been a hot topic recently. Equal Pay Day is marked annually (recently in April) and marks how far into the year women must work to earn what men earned in the previous year. The U.S. women’s soccer team made news by filing a wage discrimination lawsuit against U.S. soccer (addressed in a wonderful LCB entry by Daphne Delvaux). Because this is an election year, both Bernie Sanders and Hillary Clinton have raised this issue of wage disparity more often. Ivanka Trump even discussed equal pay for women during her speech at the Republican National Convention. The State of California addressed this issue by passing the Fair Pay Act going into effect on January 1, 2016. This law strengthened existing laws by requiring men and women to be paid equally for “substantially similar” work.
The Los Angeles Times recently reported that female attorneys at Farmers Insurance filed a class action lawsuit because they were getting paid significantly less than their male counterparts. One female attorney learned a male co-worker was making $185,000 while she was earning $99,000. This was true even though they had the same position and he earned his law license a year later. After facing some retaliation for complaining, this attorney quit and hired San Francisco attorney Lori Andrus to represent her in a lawsuit. Eventually a class action suit was brought on behalf of 300 Farmer’s attorneys with nearly 200 of them current employees.
It was learned the greatest disparity at Farmer’s Insurance occurred at higher pay levels where women were much more likely to be in a lower salary grade. This was true regardless of their bar date. Men were being promoted at higher rates “It’s not that women were being demoted,” Andrus said. “But a man would get groomed and promoted. Basically, there is male favoritism, which is probably unintentional. It’s a vestige of the good old boy network.” This matter has settled for $4,000,000. As part of the settlement, Farmers agreed to some reforms. These included increasing the number of women attorneys in its higher salary grades. The settlement also requires Farmer’s to reform its policies, including increasing the number of women attorneys in its higher salary grades.
The situation at Farmer’s is far from a unique one. Law firms, corporate offices, and government agencies across California operate in the same manner. These issues are usually swept under the rug or go undiscovered because of pay secrecy policies. There is also a general understanding that employees should not discuss salary with their colleagues. Those with a higher salary are likely aware of it and are going to be less willing to share the information publicly. Legally, employers cannot prevent their employees from discussing salary information. However, this could lead to additional retaliation (as in the Farmer’s case above) if the wage discrepancy issue is then raised with the employer.
Leave your opinion in the comments. I’d love to hear what others have to say. Is full disclosure of salary information the answer to pay discrimination? Should salary information be shared among co-workers?