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Protect Your Business from a Pay-Discrimination Lawsuit with Employment

Practices Liability Insurance by Floyd Arthur

In October 2015, Gov. Jerry Brown of California signed one of the strongest anti-discrimination laws in

the United States. Titled the California Fair Pay Act, the statute addresses the persistent and pervasive

salary gap between men and women that exists both in California and nationwide.

Title VII of the Civil Rights Act of 1964 prohibits discrimination based on race, color, religion, sex or

national origin, and this includes discrimination in pay. Nevertheless, data from 2014 shows that women

in California are paid substantially less than men—earning an average 84 cents for every dollar men

make. (That number is 78 cents on the dollar nationwide.) That gap is even larger for California’s Latina

women, who earn about 44 cents for every dollar that white men make. In all, full-time female

employees in the state earn about $34 billion less each year than males.

Changing the Rules on Pay Discrimination

Historically, the courts have viewed gender discrimination pay disputes in very narrow terms. As a rule,

women can sue for pay disparities only if they are paid less than similarly qualified male employees who

have the same job title and perform the exact same job. Thus, a female housekeeper who cleansrooms

in a hotel cannot claim discrimination if a male janitor who cleans the hotel lobby is paid more than she.

Additionally, the courts have not mandated that male and female employees who work for the same

company in different locations be paid equally. Thus, a female nurse who worksfor a large hospital chain

can be paid less than a male nurse who performs the same job duties in a hospital 5 miles away.

(According to a recent report in the Journal of the American Medical Association, female nurses in the

United States are paid an average $11,000 per year less than their male counterparts.)

By contrast, the new statute, which received strong bipartisan support, specifies that men and women

must be paid equally for “substantially similar” work. Said the bill’s author, Sen. Hannah-Beth Jackson

(D-Santa Barbara),“Now they're going to have to value the work equally.”

The law also expressly prohibits employer retaliation against employees who discuss or request

information about the wages of other employees.

Legal Experts Predict More Pay Discrimination Lawsuits

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The bill, which goes into effect in Jan. 1, 2016, is expected to precipitate an increase in the number of gender-based pay discrimination lawsuits in California, and some legal experts have expressed concern that it will negatively impact the business climate in the state. “If an employer is going to build a new call center, they are just not going to build that in California,” said labor attorney Geoff DeBoskey in a statement to the Los Angeles Times.

In order to prevail in a gender-bias pay-discrimination lawsuit, employers will have to prove that wage

differences between men and women are due to factors other than gender, such as merit or seniority,

and that they are job-related and reasonable.

Pay Discrimination Lawsuits -- 2015

The law comes on the heels of several high-profile gender-related pay discrimination lawsuits filed this

year:

In September, former Microsoft employee Katie Moussour is sued the tech giant for an

undisclosed amount, claiming that she had been paid substantially less than her male

counterparts during her seven year tenure at the company. The suit came soon after Microsoft

CEO Satya Nadella made his now famous comment that women in the tech world should not ask

for a raise, but instead have faith that “the system will actually give you the right raises as you

go along.”

In March, Chia Hong, a former program manager for Facebook, filed a lawsuit alleging that the

company discriminated against and harassed her for three years before firing her in October

2013.

Also in March, software engineer Tina Huang requested class action status in a lawsuit against

Twitter, claiming that the company’s promotion process gives men an unfair advantage over

female employees.

Additionally, in November, uniform manufacturer Cintas Corp. agreed to pay $1.5 million to settle a

class action sexual discrimination lawsuit for failing to hire qualified female applicants for sales jobs

between 1999 and 2005. The suit was filed by the Equal Employment Opportunity Commission.

Earlier this year, Unit Drilling, an oil-drilling company based in Oklahoma, paid $400,000 in damages and

other associated costs to settle an EEOC suit filed on behalf of five women who were denied

employment based on their sex. According to the EEOC, the company systemically discriminated against

women because they were “too pretty” and their presence would “distract the men.”

If asked, most employers would state that they treat female employees with the same respect and

consideration as they do men. Yet, according to U.S. Census Bureau data and other independent

research, pay inequality is a reality that occurs in the most forward-thinking firms. That’s why every

Carmoon Group Ltd. Business Insurance Hempstead New York

Floyd Arthur Insurance Expert New York

http://floydarthur.info * http://carmoongroup.com * http://floyd-arthur.com

business owner needs employment practices liability insurance, which protects the company in the

event it is sued for:

Discrimination

Wrongful termination

Failure to employ or promote

Wrongful infliction of emotional distress

Sexual harassment

Breach of contract

Unfair evaluation of an employees

Deprivation of a career opportunity

Don’t wait until you find yourself on the wrong end of a pay discrimination lawsuit to act. Contact one of

our business insurance experts to discuss employment practices liability insurance today. We are

available to take your call at 516-292-3780 Monday through Friday from 9 a.m. to 6 p.m. Or request a

free consultation online now.

Tags: Pay discrimination, Pay discrimination lawsuit(s), Employment Practices Liability Insurance