In the fourth quarter of 2018, R. Ross and C. Rogus of Santa Clara, California, filed a class action California unpaid wages lawsuit against Hewlett-Packard Enterprise (HPE). The lawsuit describes a discriminatory pattern demonstrating gender-based pay discrepancies at the company. We’ve seen tech giants in the news before for similar practices and facing similar allegations, but this case does present a few interesting issues.
1. Wage history perpetrating discrimination.
2. Employer policies discouraging employees from talking about their salary as prevention of discovery of discrimination under California’s Equal Pay Act
3. Using Secret Wage Classification and Promotion Systems to easily avoid meaningful reform.
In this California unpaid wages lawsuit, Hewlett Packard is accused of systematically paying female employees less than their similarly situated male co-workers and failing to advance them at the same rate as male employees performing similar work at a similar skill level. The business practices are apparently in place throughout all of California and are built on preexisting practices at Hewlett-Packard.
As of January 1st, 2018, employers in California are prohibited from asking job applicants about their salary history or using a salary history to determine what salary to offer a new employee. This was an effort to decrease the long-term effects of past salary discrimination. This law, however, does not offer protection to workers hired prior to that date or current employees who are seeking an internal promotion. Long-term workers who are seeking to make a career with a single employer will not find assistance for past pay discrimination in the law that went into effect January 1st, 2018. In the complaint against HPE, it is alleged that long-term employees tend to stay at the lower-paid job level 1 or 2. In comparison, new hires start at or quickly rise to a higher paid level 3.
Raises at the company are based on a percentage of the employees’ existing HPE salary, so they not only support the gender pay gap, but widen it. The longer a female is employed by HPE, the less she will be paid in comparison to her male counterparts even when fulfilling similar job duties at an equal or better rate. Gender discrimination paired with age discrimination combine to leave older female employees double affected.
Pay secrecy policies are still a common practice, particularly in the tech industry. Policies requiring silence about pay have been prohibited in most industries since 1935 by the National Labor Relations Act. Pay secrecy policies are also banned by California Labor Code section 232. Since 1985, the law has specifically prohibited the requirement of any employee to refrain from disclosing their wage or requiring an employee to waive the right to discuss their wage, or to discipline an employee for discussing their wage. Yet many employees are unaware of their rights and many employers still discourage (officially or unofficially) pay secrecy.
Similarly, when wage and promotion structures are not transparent, workers are prevented from acting on discriminatory behavior. Many employees are reluctant to act or share information with co-workers but find themselves suffering from vague or opaque employer pay scales and promotion structures.
If you are suffering from the effects of gender-based pay discrimination or you need help seeking equal pay in the workplace, please get in touch with one of the experienced California employment law attorneys at Blumenthal Nordrehaug Bhowmik De Blouw LLP.