Google Pay Disparity Accusation Questioned by Judge

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By Chris Opfer

The Labor Department’s claim that Google Inc. pays women workers less than men for the same jobs is being called into question by a federal administrative law judge.

Judge Steven Berlin said in a decision made public July 16 that the Labor Department’s assertion that it has uncovered wide pay disparities among men and women workers at Google’s headquarters is “legally questionable and factually unsupported at this point.” The judge declined the DOL’s request to order the company to turn over salary history information for some 25,000 workers as part of a government contractor audit.

Labor Department Regional Director Janette Wipper told Berlin in April that the department already has evidence of “systemic compensation disparities against women pretty much across the entire workforce.” The department sued the company to try to force it to turn over the salary histories and other pay data requested during a random audit by the DOL’s Office of Federal Contract Compliance Programs.

Berlin said he wouldn’t force the company to turn over the requested salary histories, dating back to Google’s founding in 1998. The DOL failed to show the requested data was sufficiently relevant to outweigh the burden that collecting the information would pose to the company, he said.

“While we’re pleased with Friday’s recommended decision, we remain committed to treating, and paying, people fairly and without bias with regard to factors like gender or race, Eileen Naughton, a Google vice president, wrote in a blog post on the company’s website July 17. “We are proud of our practices and leadership in this area, and we look forward to working constructively with OFCCP, as we complete this review and in the future.”

The DOL argued that it needed the salary history information to determine whether some workers were trapped in a cycle of lower pay rates based on their previous salaries, or what department officials called an “anchoring bias.” Berlin said he would allow the department to renew the salary history information request if it can show that the request is reasonable, relevant and not “unduly burdensome.”

Berlin did, however, order Google to turn over a snapshot of pay, job duties, and other information for 21,000 workers from 2014. He also said the company has to provide the DOL with contact information for up to 8,000 Google workers.

“The decision gave the OFCCP more than 90 percent of everything that was requested,” DOL Regional Solicitor Janet Herold told Bloomberg BNA. “This is a complete vindication for the department.”

The OFCCP audits federal contractors—identified in a “neutral selection process”—to ensure compliance with pay discrimination regulations and other worker protections. Google has worked on a number of government contracts with the General Services Administration, the Commerce Department, and the Department of Defense.

Salary History in Spotlight

The Google decision comes as businesses, lawmakers, and advocates continue to debate whether employers should be allowed to ask job applicants about their previous salaries during the hiring process.

“Our preliminary analysis shows there are huge disparities between men and women doing the same job with the same job title,” Herold told Bloomberg BNA. “If the only deviation is prior pay, that raises the question of whether prior pay is an appropriate factor.”

Massachusetts and California already have state laws banning or limiting the use of salary histories. New York City, San Francisco, and Philadelphia also have similar bans pending.

Two Labor Department investigators testified in April that Google officials said during an on-site inquiry that the company asks potential new hires about their most recent salaries and tries to beat those figures by as much as 20 percent. Although Google Compensation Director Frank Wagner largely denied those statements during his own testimony the same day, a company spokesman later told Bloomberg BNA that salary history is one piece of the puzzle for setting pay rates.

“OFCCP should be focused on whether employees are being paid fairly today,” Alissa Horvitz, who represents contractors in pay equity audits and is not involved in the Google case, told Bloomberg BNA July 17. “Isn’t that the whole point?” Horvitz said it would be an “extraordinary effort” if contractors were required “to recreate each and every salary decision.”

DOL Seeks Worker Input

Federal contractors have been closely watching the Google case, hoping that Berlin would draw a clear line limiting the amount and type of information that the OFCCP can demand during an audit. Although Berlin indicated in a previous decision that those limits may depend on the amount of business the contractor does with the government, he focused on relevance and the burden to the employer in the latest ruling.

“Whatever speculative relevance there might be also fails to outweigh the burden this request places on Google and its employees,” Berlin said, referring to the salary history request.

Meanwhile, Herold told Bloomberg BNA that the department intends to use the worker contact information to reach out to Google workers to get their input on pay issues. The DOL is also going to encourage workers to contact investigators directly.

A National Labor Relations Board regional director in April issued a complaint against Google, alleging that the company threatens workers who talk about salaries and working conditions.

“We really want to hear from the eyes and ears at Google about what they are seeing and what they are hearing,” Herold said. “The department takes seriously workers’ right to talk to the government.”

To contact the reporter on this story: Chris Opfer in New York at copfer@bna.com

To contact the editors responsible for this story: Peggy Aulino at maulino@bna.com; Terence Hyland at thyland@bna.com;

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