Google’s Search for Pay Data Was Onerous, It Tells Court

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By Joyce E. Cutler

Alphabet Inc.’s Google employees and contractors spent more than 2,300 hours gathering and processing the pay data the company has already turned over to the Labor Department as part of a random audit of government contractors, a Google manager said May 26.

The DOL wants Google to cough up a wide range of information about how the company pays its more than 21,000 workers. But the Silicon Valley giant, like other tech companies, is hyper protective of its compensation policies.

The case is being closely watched by contracting businesses that want to know just how much data they have to share with the DOL’s Office of Federal Contract Compliance Programs.

Google is asking the court to rule the OFCCP’s requests for outside and prior wage history are unreasonable and unconstitutional, or, in the alternative, to “blue pencil” the request to impose reasonable limits ( OFCCP v. Google, Inc., Dep’t of Labor A.L.J., No. 2017-OFC-00004, 5/26/17 ).

Google is trying to avoid turning over a snapshot of pay data dating back to its founding and contact information on all of its headquarters workers. The company says it has already gone to great lengths to compile thousands of other requested compensation records.

Google engineers had to write a program to gather and process information in disparate systems, while a dozen staff lawyers reviewed the documents and redacted personal information, Kristin Zmrhal, Google senior legal operations manager, said during a hearing before a DOL administrative law judge. Outside contractors were hired and spent another 400 hours redacting documents, Zmrhal told Administrative Law Judge Steven Berlin in San Francisco.

DOL Regional Director Janette Wipper said during an April hearing that the department had already uncovered “systemic compensation disparities against women pretty much across the entire workforce” at Google’s Mountain View, Calif., headquarters.

The DOL is trying to understand Google’s pay decisions and wants information on bonus pay, stock options, pay at previous positions, and salary history. It also wants to interview workers about September 2013-September 2015 pay issues. Google is arguing, among other things, the request is burdensome and has Fourth Amendment implications.

80 Percent

The parties May 26 returned to a San Francisco DOL hearing room as Frank Wagner, Google compensation director, once again took the witness stand.

Wagner said Google offers new hires, either new college graduates or from the industry, 80 percent of the pay it calls the market reference point. It’s atypical to offer more than that 80 percent, Wagner said.

The Labor Department appears to be interested in particular in whether Google uses new hires’ previous salaries to set compensation rates. DOL officials say that practice could create an “anchoring bias” that cements previous pay discrimination by trapping women in a cycle of salaries lower than those of male colleagues doing the same jobs.

Wagner during April 7 testimony said previous salary wasn’t a consideration, though he said the information is captured. He also acknowledged that the company at times will offer a higher sign-on bonus or more stock options to workers who got those perks at their previous jobs.

DOL Says Requests Reasonable

Labor Department lawyer Ian Eliasoph called Google’s attempt to avoid divulging the pay data “superficial” and “beyond farfetched.”

Google made $28 billion in profit in 2016 and millions of dollars from federal contracts, yet now is urging the ALJ “to adopt a too-big-to-comply defense to a regulatory obligation,” Eliasoph, counsel with DOL’s Regional Solicitor’s office in San Francisco, told the judge. He also said the company can absorb the cost of complying “as easily as a dry kitchen sponge can absorb a drop of water,” Eliasoph said.

The judge noted the Memorial Day holiday may cut into transcribing a transcript of the hearing, which he will use in making his ruling.

“I very much doubt I will have this completed before the end of next week,” Berlin said.

To contact the reporter on this story: Joyce E. Cutler in San Francisco at JCutler@bna.com

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

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