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State Street Corp. will pay $5 million to settle Labor Department allegations that the company discriminated against more than 300 female executives by paying them less than male colleagues.
This is the largest pay discrimination settlement collected by the DOL’s Office of Federal Contract Compliance Programs, at least since the agency made pay equity one of its top enforcement priorities under the Obama administration. It’s also the largest overall settlement collected by the agency since at least 2015.
The OFCCP earlier this year settled pay bias claims with LexisNexis Risk Solutions, Qualcomm, LabCorp, B&H Foto & Electronics Corp., and Land O’Lakes. The agency regularly audits government contractors for compliance with workplace affirmative action and nondiscrimination requirements.
The agency expressed interest in increasing its focus on contractors in the finance and technology sectors in the last year of the Obama administration. The agency said it plans to continue that focus during the Trump administration.
Historically, many of the agency’s settlements involved hiring discrimination allegations on behalf of entry-level applicants for blue collar jobs, usually in manufacturing or clerical fields. Pay bias settlements for white collar professional positions, especially at the executive level, are less common.
Female senior vice presidents, vice presidents, and management directors were paid lower base salaries, bonus pay, and total compensation per year than men in the same positions “since at least December 1, 2010, and continuing thereafter,” the agency alleged after auditing State Street’s corporate headquarters in Boston in 2012. Agency reviews generally include analyses of a contractor’s employment data, such as in hiring or pay.
The OFCCP also alleged that the company during the same time period paid lower base salaries and total compensation to black vice presidents in comparison to white executives in the same positions.
“OFCCP’s analysis demonstrates that a statistically significant disparity in compensation remained even when legitimate factors affecting pay were taken into account,” the agency said in a conciliation agreement with State Street signed Sept. 29 but posted to its Freedom of Information Act website Oct. 4. Those factors can include performance, experience, and education.
The settlement fund, which includes back pay and interest, will be distributed to 305 female and 15 black class members. State Street also agreed to conduct further compensation analyses and make salary adjustments where pay disparities by race, sex, or ethnicity can’t be explained by legitimate factors.
“State Street is committed to equal pay practices and evaluates on an ongoing basis our internal processes to be sure our compensation, hiring and promotions programs are nondiscriminatory,” a company spokeswoman told Bloomberg BNA in an Oct. 4 statement. “While we disagreed with the OFCCP’s analysis and findings, we have cooperated fully with them, and made a decision to bring this six year-old matter to resolution and move forward.”
State Street has received more than $51 million in government contracts since fiscal year 2014, according to Bloomberg Government’s Contracts Intelligence Tool.
A Labor Department spokesman Oct. 4 declined to comment beyond the terms of the settlement agreement.
(Story has been updated to reflect the scope of class members and the date of the OFCCP audit.)
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The settlement agreement is available at http://src.bna.com/s55.
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