ABA Speakers Discuss Causes, Remedies For Persistent Pay Gap Between Sexes

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By Kevin P. McGowan  

Nov. 8 --A persistent gap between the median earnings of all women and all men working in the United States is not the result of employers giving men and women unequal pay for performing the same jobs, a management attorney told attendees Nov. 7 at an American Bar Association meeting.

Addressing a session of the ABA Section of Labor and Employment Law's annual conference in New Orleans, Gary Siniscalco, a partner with Orrick Herrington and Sutcliffe in San Francisco, said despite the Obama administration's focus on closing the gender pay gap, neither the Labor Department nor the Equal Employment Opportunity Commission has developed many triable pay discrimination cases over the past three years.

The administration, which formed the National Equal Pay Enforcement Task Force in March 2010 (57 DLR A-13, 3/26/10), embarked on a search for “massive wage discrimination” by federal contractors and employers covered by Executive Order 11,246 and Title VII of the 1964 Civil Rights Act but it has come up largely empty, Siniscalco said.

EEOC statistics show that during fiscal years 2011 and 2012, the commission began 26 directed investigations of Equal Pay Act claims, but only one resulted in a reasonable cause determination and litigation, Siniscalco said. The EEOC also received about 2,130 charges alleging EPA violations in fiscal years 2011 and 2012, but found cause to support only 39 of those charges, eight of which were settled and two of which went to litigation, Siniscalco said.

Of the approximately 6,400 Title VII charges alleging wage discrimination based on sex in fiscal years 2011 and 2012, the EEOC found cause in 56 charges, settled 14 of those and took four cases to litigation, Siniscalco said.

Although the OFCCP has conducted more than 14,000 compliance reviews of federal contractors since the equal pay task force began in 2010, that agency reports it has found “more than 80” but presumably fewer than 90 contractors showing signs of pay discrimination, Siniscalco said. That amounts to less than 1 percent of all contractors audited, even though single establishments should provide the perfect “cohort analysis” for wage comparisons, he said.

This “field data” suggest there is no massive wage discrimination being practiced by employers, Siniscalco said.

OFCCP Taking Broader Focus

Pamela Coukos, an OFCCP senior adviser who focuses on compensation discrimination, disagreed with Siniscalco's characterization that the administration has declared war on employers and is losing the conflict.

Instead, she said, the OFCCP, by rescinding a Bush administration guidance on pay discrimination and replacing it with guidance that permits a broader focus on federal contractors' compensation systems (39 DLR A-1, 2/27/13), now has a better shot at finding and addressing the root causes of gender pay gaps in particular workplaces.

The OFCCP is not engaged in a battle against contractors, but rather is counting on them to “step up” and do the things government cannot do by conducting internal analyses of their compensation systems and addressing sex- or race-based disparities where they occur, Coukos said.

Coukos said the government needs better data so it can determine how much of the unexplained gap in pay possibly is due to women's career choices and how much can be attributed to the “structure” of workplaces.

The message of the 2010 task force (138 DLR AA-1, 7/20/10) was that federal agencies, including the OFCCP, the EEOC and the Justice Department, “need to get serious and make sure there aren't any gaps in enforcement that need to be addressed,” Coukos said.

The OFCCP's new guidance on reviewing contractors' compensation practices allows a “broad look” at all the employment practices, including job assignments, promotions, performance reviews and training opportunities, that affect employee pay, Coukos said.  

The respective agencies since then have collaborated and “are doing our job much better,” Coukos said. The OFCCP's new guidance on reviewing contractors' compensation practices allows a “broad look” at all the employment practices, including job assignments, promotions, performance reviews and training opportunities, that affect employee pay, Coukos said.

Pockets of Bias Seen

Adam Klein, a plaintiffs' attorney with Outten & Golden in New York, challenged Siniscalco's assertion that employers are not giving unequal pay for equal work performed by men and women.

Klein said in particular industries, including pharmaceutical sales and financial services, women were compensated less than men for performing the exact same jobs. The large jury verdicts against Novartis (96 DLR AA-1, 5/20/10), for example, and settlements by financial industry giants such as Morgan Stanley (211 DLR A-14, 11/1/07) and Merrill Lynch (174 DLR A-1, 9/9/13), indicate that pay discrimination is alive and well against women and racial minorities, Klein said.

Siniscalco noted those cases were filed under Title VII, which allows a broader inquiry into sex-based wage discrimination than the Equal Pay Act. Siniscalco said although a statistical gap between the pay of all female workers and all male workers doubtless exists, it is not because employers are paying women less than men for performing equal work.

Klein said another pocket of sex-based pay discrimination is the supermarket industry, in which women are steered into dead-end cashier positions while men take entry-level clerk jobs that put them on a career path for promotion.

Caregiver status also leads to sex-based pay discrimination as professional women who take maternity leave, for example, fall behind their male peers, and that can have a “cascading effect” in jobs where performance and promotion may be based partly on hours worked, Klein said.

Klein suggested an examination of performance appraisal criteria is warranted, as it is clear that employers engage in guesswork when trying to evaluate the relative merits of employees. Even women perceived by employers as “at risk” for taking maternity leave or other family leave can pay a price in compensation, he said.

Statistics on Pay

Stephanie Plancich, a vice president with NERA Economic Consulting in Washington, said depending on the database used, women as of 2012 earned between 77 and 81 cents for every dollar earned by men.

Studies show that after accounting for neutral factors such as education levels, occupation, experience, and tenure in jobs, about 40 percent of the roughly 20 cent pay difference remains unexplained, she said.

Job segregation may play a part, as men hold more than 70 percent of the positions in “STEM” industries--referring to science, technology, engineering and math--while women hold more than 70 percent of jobs in lower-paying fields such as teaching and the caring professions, Plancich said.

Data from the Labor Department's Bureau of Labor Statistics indicate that among younger women, the gender wage gap is more like 90 cents for every dollar earned by men, Plancich said.

The wage gap is even wider when black and Hispanic women are compared with men, according to Louis Lopez, a Justice Department attorney who moderated the session.


Potential Solutions Discussed

Siniscalco said he opposed the proposed Paycheck Fairness Act (H.R. 377, S. 84), which would enhance damages under the EPA and place the burden of proof on employers, because it is attacking a supposed problem of unequal pay for equal work that is not the real dilemma.

Rather, Siniscalco said the Labor Department and state workforce investment must do more to educate and train women for jobs in higher-paying fields and government and employers in general must do more to support female employees with caregiver duties.

Siniscalco said some facets of the Paycheck Fairness Act, such as grants to train women in negotiating skills, make sense to him but the overall legislation is misguided.

Klein said the notion there is a gender-based difference in negotiation skills, or indeed any employment-related skills, is “bunk.”

Like Coukos, Klein said a broad approach is necessary as many employment practices seemingly unrelated to pay have a cumulative effect on compensation that can disadvantage women and minorities


To contact the reporter on his story: Kevin P. McGowan in New Orleans at kmcgowan@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com