Pay-equity claims are increasing amid greater public awareness, new state laws and multimillion-dollar settlements, putting company policies ever more in focus and creating “minefields” for compliance, a team of management-side lawyers said Wednesday.

Attorneys from Littler Mendelson, speaking on a webinar about the pay-equity landscape, urged companies to take fresh looks at compensation schemes and be prepared to upend long-held practices that have created lawsuit vulnerability.

“The number of claims are increasing,” said Denise Visconti, a Littler shareholder in San Diego. “The new statutes are coming online and we will continue to see this increase.”

Addressing risks and challenges, Visconti said companies should consider updating policies and training. Job descriptions, she said, should be specific, allowing companies to defend their pay scales.

“Look for the minefields in recruiting, employee handbooks, manuals for [human resources] and management training,” Visconti said. “You can run into trouble because documents don't match what you are saying.”

The attorneys pointed to several high-profile pay-equity cases, including more than 400 workers suing a pharmaceutical company in a lawsuit valued at $250 million and a prominent law firm sued by female attorneys for $100 million. A telecommunication company settled for $19.5 million, and a national insurer paid $4 million.

Two gender-pay class actions targeting Silicon Valley and Wall Street moved forward last week in the courts. Judges found in the cases against Google Inc. and Goldman Sachs that companywide policies were grounds to include thousands of women in the lawsuits.

Equal-pay claims are rising, with dozens of suits pending in state courts. Theses cases are single-plaintiff and class actions, and the suits often are coupled with discrimination, sexual harassment and wrongful termination. At the same time, the #MeToo and #TimesUp movements have fostered greater public awareness of alleged abuses in workplaces.

A new analysis from the National Women's Law Center released Wednesday shows the gender wage gap remains pervasive across industries. In low-wage jobs, women make 71 cents for every dollar paid to men and in high-wage jobs, women make 74 percent for every dollar paid to men in the same occupations. The high-wage jobs include lawyers and engineers. Among physicians, women make 66 cents on the dollar compared to men, according to the report.

Twelve states have recently filed legislation to address pay equity, including proposals to ban salary history questions during the interview process. Already, 23 states have equal-pay laws. These laws essentially reduce the number of defenses for employers when they are challenged, Visconti said.

“The focus becomes employers' policies and the employers' practices, and not just individual claims,” she said. “The theory is workers are not treated fairly, whether it's a discrimination issue, an access issue or pay-equity issue. The plaintiffs' attorneys will see what washes out in discovery.”

This wave of momentum in pay-equity law and lawsuits makes it important for businesses to recognize and consider reputation, said Allan King, an Austin-based Littler shareholder in the firm's class action practice. The recent social movements, he said, have “generated the most movement in the space for business and reputational standpoint,” King said.

Companies increasingly are repositioning themselves to differentiate and sell themselves.

“It's become a badge of honor that companies see as critical to maintaining talent,” King said. “That's a fundamental shift.”

Instant Insights /

Pay-equity claims rising, creating compliance 'minefields'

More From HR Executive

Related Stories

Recommended For You