Is Your Company Vulnerable to the New Wave of Sex Discrimination Class Actions?

As we have written about previously, the #MeToo movement is spurring changes in harassment and discrimination law.  One of these changes appears to be a new wave of class action sex discrimination lawsuits that do not simply focus on one alleged discriminatory practice at a time – such as pay discrimination, or a hostile working environment – but instead challenge a myriad of alleged practices that affect female employees, including pay discrimination, promotion discrimination, hostile environment harassment, and disparate treatment of pregnant employees or those with childcare responsibilities.  Such suits have recently been filed against Nike, Goldman Sachs, Jones Day, KPMG, Morgan Stanley, Morrison Foerster, and many other companies.

These cases rely on several forms of evidence to support the claims, usually put forward by a small number of plaintiffs but alleged to have occurred to numerous other female employees.  Some examples of the proof set forth in recent cases include:

  • Pay disparities
    • Employer based female employees’ compensation on prior salary history and on skewed rating systems implemented by a small group
    • Evaluation metrics, including “360 reviews,” disadvantaged female employees based on statistical analysis
    • Firm’s managing partner personally signed off on all associate pay and promotions decisions, allegedly facilitating biased decisions
  • Data regarding the make-up of the employer’s executive or management ranks and the results of promotions decisions
    • Disproportionately low number of women identified for promotional opportunities and women “channeled” into less-valuable positions
    • Pay increases and promotions denied after maternity leave, even though hourly billing rates had increased
  • Harassing sex-based comments or conduct
    • Human Resources ignored or dismissed valid harassment complaints
    • Numerous anecdotes of sexual harassment, sex-based comments, verbal abuse, stereotyping against female employees collected over lengthy period of time
    • Alcohol-fueled social events in the office led to harassment of female employees
    • Female employee regularly received “unwanted sexual attention” and comments about her clothes and appearance
    • Female employee’s facial expressions deemed too “stern” by male attorneys
  • An “old boy” or “bro” culture
    • Male partner made summer interns sing a song from the “Care Bears” cartoon prior to receiving job offers
    • Female employees forced to do more administrative and pro bono work than male employees
  • Retaliation for childcare responsibilities and/or pregnancy and maternity leave
    • Employer took accounts away from pregnant employee, gave her a negative performance evaluation, discouraged her from pumping breast milk, failed to annualize her performance metrics to account for maternity leave, and terminated her shortly after returning from maternity leave
    • Female employee overloaded with work when pregnant, which was then used as a basis to pressure her out of the firm
    • Female employee’s pay reduced after asking questions about the firm’s parenting policies
    • Female employee’s workload dried up in part because of purported concerns about pregnancy and child-related medical leave
    • Male employee said “we didn’t realize you were a parent when we extended you the offer” and “parents tend not to do well in this group”
    • Unfair performance evaluations upon return from maternity leave

To be sure, these allegations are vigorously disputed by the employers at issue, and to date no judgment have been made about whether certain of the harassment allegations, even if true, state a claim for sex discrimination.  Importantly, though, each of the cases involve at least several of the above types of allegations, not one or two.  These cases are dangerous and costly to defend because they involve sweeping claims about the company’s culture and practices, and often involve numerous employees.

The Bottom Line for Employers

Employees and their counsel now seem far more willing to pursue hybrid sex discrimination class actions, based on both statistical and anecdotal evidence, than in previous years.  Many of these cases focus on the experiences of employees who are pregnant, on maternity leave, or have childcare responsibilities, and explore whether such employees are disadvantaged as a result.

The allegations highlighted above provide employers with a roadmap as to the types of claims that form the basis for this recent breed of lawsuit.  To put themselves in the best possible position to detect and prevent such situations from developing, employers should evaluate their workplace and consider whether it makes sense to take one or more of the following steps:

  • Conduct privileged and confidential compensation analyses designed to detect potential pay disparities. If disparities are discovered, have a plan (and the will) to address them.
  • Conduct privileged and confidential workforce assessments designed to detect potential disparities in promotional opportunities and hiring decisions. Again, be prepared to act in the event that disparities are discovered.
  • Implement a robust complaint and reporting procedure for allegations of harassment or discrimination. To be effective, a procedure must be visible and accessible to employees, have the full backing of upper management, and not lead to retaliation or the threat of retaliation.
  • Conduct prompt and effective investigations and remedial action in response to complaints. Depending on the experience level of the company’s internal investigators, this may necessitate additional training for Human Resources or other departments charged with these responsibilities.  Depending on the company’s size and the particulars of certain complaints, it may also necessitate hiring outside investigators in certain cases.
  • Train employees and management on the employer’s complaint procedures and educate them on conduct that is prohibited by company policy or the law. It is often wise to conduct separate training sessions for employees and management.  Upper management’s commitment to the process should be visible.
  • Have a well thought-out approach to the accommodation and treatment of female employees who are pregnant, returning from maternity leave, or have childcare responsibilities. The approach must be mindful of employers’ reasonable accommodation, non-discrimination, and non-retaliation responsibilities under the Pregnancy Discrimination Act and the Americans with Disabilities Act.  The company’s actions must also, depending on the circumstances, comply with the Family and Medical Leave Act and similar state leave laws.