Wednesday marks Equal Pay Day — the day on which women’s average 2020 pay catches up with what men made last year. With a worker-friendly administration in the White House and many states taking matters into their own hands, here’s an overview of what employers should expect on the pay equity front in 2021.
One measure to watch is the newly reintroduced Paycheck Fairness Act — a version of which, according to one of its sponsors, was first floated in Congress in 1997. The PFA would amend the Equal Pay Act of 1963 in part by narrowing employers’ defenses to existing pay gaps. It would also institute bans on asking for an employee’s salary history and on punishing workers who discuss pay.
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The Paycheck Fairness Act
Many experts have in their sights the provision in the Paycheck Fairness Act that would narrow the “other than sex” employer defense in the Equal Pay Act by requiring employers to give a concrete reason why a female employee was paid less than a man in a similar position, for example, “education, training or experience.”
At a congressional hearing on the Paycheck Fairness Act and other civil rights bills last week, Fatima Goss Graves, CEO and president of the National Women’s Law Center, called the current defense a loophole.
“The ‘factor other than sex’ continues to be such a large loophole it swallows the whole requirement that you pay people equal wages for doing equal jobs,” she said.
Currently under the Equal Pay Act, employers can often use the “other than sex” defense to cite a woman’s previous salary as the reason for a pay discrepancy at their organization, said Christine Webber, a worker-side partner in the civil rights and employment practice group at Cohen Milstein Sellers & Toll PLLC. Advocates like Goss Graves say that can perpetuate a wage gap throughout a woman’s entire career.
Webber said it’s important that employers be prohibited from taking someone’s previous salary into consideration at all. But in some states that have barred employers from asking for salary history, employees can still volunteer the information and their employers can use it, she said.
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The Paycheck Fairness Act also would allow employees to pursue class actions instead of collective actions, Gagnon added — in other words, workers could be automatically included in a lawsuit class unless they opted out, rather than be required to affirmatively opt in.
Webber meanwhile said some would-be plaintiffs fear retaliation from their employers if they opt into a pay bias suit, and that defense attorneys might be over-exaggerating the danger of class actions.
“It is not easy to get a class certified,” Webber said. She pointed to the famous Dukes v. Walmart pay bias case, which she worked on “from pretty much the beginning.”
In that case, the U.S. Supreme Court ruled 5-4 that the plaintiffs, female employees alleging they were paid less than their male counterparts and had fewer opportunities for promotions, hadn’t met the standards for class certification.
“I think employers tend to go sort of Chicken Little and assume that every equal pay claim is going to, you know, slap on a Rule 23 class action claim to go with it, and then their sky will be falling,” Webber said. “And I think that’s unlikely.”
A version of the Paycheck Fairness Act passed the House in 2019, 242-187. It’s likely to pass the House again, experts predicted, and has the support of President Joe Biden.
Cohen Milstein’s Webber said she thought that if the bill got to a vote in the Senate, it would pass, but noted that’s an open question given the existence of the filibuster.
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The Racial Pay Gap
Wednesday’s Equal Pay Day date is a general marker, denoting the day when the pay of all U.S. women averaged together catches up with the pay of all men averaged together. For women of color, the disparity is even more stark: Equal Pay Day for Latina women, who earn just 55 cents for every dollar a white man earns, is not until Oct. 21, according to nonprofit group Equal Rights Advocates.
Worker-side attorney Webber said that while she thinks the Paycheck Fairness Act is “a great improvement that should be adopted,” if she could, she would amend it to include protections for race, noting that California recently did so.
Changes to the Golden State’s Equal Pay Act effective in 2017 barred employers from paying someone less than a co-worker who does “substantially similar work” because of gender, race or ethnicity.
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The EEOC briefly collected race- and gender-based pay data from employers, but the utility of that information is currently the subject of a study from the National Academies of Sciences, Engineering and Medicine.
Webber called for making claims more attainable to plaintiffs, as well as race-based protections.
“It just is another tool in the toolbox,” she said of race protections. Women of color can mention white male “comparators” — workers in similar positions who were paid more — and an employer would not be able to say that the gap was because of race or gender, Webber noted.
But under the current system, a Black man couldn’t make the same claim under the Equal Pay Act, Webber explained — he would have to rely on another civil rights law such as Title VII of the Civil Rights Act of 1964 or Section 1981 of the Civil Rights Act of 1866, which require different burdens of proof.
An Illinois federal judge on Monday granted preliminary approval to a $104 million settlement with four poultry producers to resolve claims from a group of consumers who say the companies engaged in a long-term scheme to fix prices for broiler chickens.
U.S. District Judge Thomas Durkin said during a hearing Monday that the deal — which was reached with only some of the chicken producers roped into the case: Tyson Foods, Fieldale Farms, Peco Foods and George’s Inc. — appeared to be fair and reasonable and was reached after hard-fought negotiations, with millions of documents exchanged and more than 100 depositions taken.
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The litigation began in September 2016 when private plaintiffs began claiming the nation’s largest broiler chicken producers coordinated and limited chicken production with the goal to raise prices and exchanged detailed information about prices, capacity and sales volume through data compiler Agri Stats Inc.
The end-user plaintiffs are represented by Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC.
The Biden administration’s Labor Department is empowering career officials across the U.S. to deploy a range of enforcement tools when scouring businesses for wage violations, overturning a Trump-era policy that consolidated approval of such decisions under one politically appointed leader.
Jessica Looman, the principal deputy administrator of DOL’s Wage and Hour Division, earlier this month revoked 2019 instructions issued by the Trump-appointed WHD Administrator Cheryl Stanton, according to an internal memo obtained by Bloomberg Law.
Looman, who arrived on Inauguration Day, is ceding control to regional and district office personnel, who now gain final approval on multiple actions—such as more stringent back-wage settlements—that crack down on employers accused of shorting workers on pay.
Previously, many of these activities required Stanton’s final approval, which sent a chilling effect to the enforcement field that stopped some career officials from pursuing those means and methods, according to current and former DOL officials.
By spurring more frequent and faster use of wage investigation tactics, the changes are likely to deliver a more punitive enforcement philosophy when WHD investigators scrutinize company payroll practices.
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Off-Limit Tools
Looman’s March 8 memo came amid a series of DOL regulatory and policy decisions that voided employer-friendly measures. It delegated to regional administrators, who are career civil servants, authority to greenlight their staff’s use of:
- “Enhanced compliance agreements” in settlements, which generally require more egregious violators to take steps to ensure adherence to wage laws;
- Visa certifications for undocumented workers who are victims of severe workplace crimes;
- Cooperation agreements with state agencies to share information;
- “Sharing letters” between WHD and other government agencies investigating the same workplace; and
- Requests to withhold payments to government contractors who owe workers wages.
Utilizing those means often requires time-sensitive decisions that must be made by the qualified, veteran officials on the ground, not by the national administrator, said Michael Hancock, a former senior WHD official in the Obama administration who worked at the division for two decades.
“If the reality is I can’t decide which of these tools that I can use today, those are effectively tools that aren’t available to me,” said Hancock, now a plaintiff attorney at Cohen Milstein in New York. He called Looman’s memo an “important step in trying to rebuild the relationship between the national office and the field.”
Tyson Foods Inc., Pilgrim’s Pride Corp., Hormel Foods Corp., and other top poultry processors must face antitrust claims over an alleged industrywide plot to drive down the wages of their largely immigrant workforce, a federal judge in Maryland ruled Thursday.
Judge Stephanie A. Gallagher, who tentatively tossed the case last year, said this time around that the plaintiffs—chicken plant employees paid by the hour—can lead a lawsuit on behalf of all poultry workers, including turkey plant employees and those on salary. They all allegedly felt the scheme’s impact similarly, the judge said.
The suit “sufficiently pled the existence of a singular poultry labor market” affected “by the same exact anti-competitive conduct,” Gallagher wrote. That suggests the “plaintiffs have a sufficient personal stake” in the case, even with respect to “class members from slightly different backgrounds,” she said.
The ruling clears the way for the proposed class action to move forward in the U.S. District Court for the District of Maryland with claims that the poultry processors colluded to depress pay through illegal data exchanges and annual secret meetings at a Florida hotel.
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Handley Farah & Anderson PLLC, Cohen Milstein Sellers & Toll PLLC, and Hagens Berman Sobol Shapiro LLP are interim co-lead counsel for the plaintiffs, who are also represented by Lockridge Grindal Nauen PLLP, Keller Rohrback LLP, Berger Montague PC, Kramon & Graham PA, Hardin & Hughes LLP, Butler Farm & Ranch Law Group PLLC, Robins Kaplan LLP, the Dampier Law Firm PC, and Shapiro Sher Guinot & Sandler.
A participant in a 401(k) plan run by New York Life Insurance Co. has sued the company and plan fiduciaries alleging violations of their ERISA responsibilities for two company retirement plans.
“This suit is about corporate self-dealing and the prohibited transfer of employees’ retirement assets to defendants at the expense of the retirement savings of company employees and its agents,” said the March 2 complaint filed in a U.S. District Court in New York in the case of Stuart Krohnengold vs. New York Life Insurance Co. et al.
Mr. Krohnengold is a participant in the New York Life Insurance Co. Employee Progress-Sharing Investment Plan, and he also is suing, as part of a class action claim, to represent the New York Life Agents Progress-Sharing Investment Plan. The former had assets of $3.51 billion and the latter had assets of $846 million, both as of Dec. 31, 2019, and both according to the latest Form 5500s.
Mr. Krohnengold’s complaint also accused the defendants of offering proprietary products “earning New York Life and its affiliates windfall profits at the expense of the retirement savings of New York Life employees and its agents.”
Cohen Milstein Sellers & Toll PLLC represents the proposed class.
WHAT TO KNOW:
- Part of a larger $104 million deal, first reached by consumers.
- Comes days after tentative approval of wholesaler settlement.
The consumers leading a proposed chicken price-fixing class action over an alleged industrywide scheme revealed a $99 million settlement with Tyson Foods Inc., part of a larger $104 million “icebreaker” deal they disclosed in a Chicago federal court.
The agreement, which includes a cooperation pledge, is the first between the consumer plaintiffs and the poultry processors they targeted in the U.S. District Court for the Northern District of Illinois, where the consolidated case also includes antitrust claims on behalf of retailers and wholesalers.
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The lawsuit accuses the top U.S. chicken processors of inflating prices through long-term supply reductions, achieved by culling flocks of “breeder” hens, and through an index run by Eli Lilly & Co. subsidiary Agri Stats Inc. The dispute recently added bid rigging claims by restaurant chains including Boston Market, Johnny Rockets, and Subway.
The poultry processors have also faced antitrust claims over alleged schemes to fix the wages of their mostly immigrant workforce and drive down compensation for the permanently indebted “modern-day sharecroppers” who raise chickens for them.
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The consumers are represented by Hagens Berman Sobol Shapiro LLP and Cohen Milstein Sellers & Toll PLLC.
New York Life Insurance Co. was sued by a former employee who says the company engages in self-dealing and earns “windfall profits” from a pair of retirement plans covering tens of thousands of employees and insurance agents, according to a proposed class action filed in federal court in Manhattan.
Stuart Krohnengold’s lawsuit, filed in the U.S. District Court for the Southern District of New York, accuses the insurer of improperly profiting off its workers’ retirement savings by defaulting certain retirement plan participants into an undiversified general account insurance fund. This fund—called the Fixed Dollar Account—isn’t a permissible 401(k) default investment, and it allows New York Life and its affiliates to earn “enormous profits and billions of dollars to be used for its own business purposes while exposing most of the Plans’ assets to New York Life’s credit risk,” he claims.
Krohnengold also accuses New York Life of offering its own affiliated investment products in the plans without properly considering lower cost and better performing alternatives from competitors. These two failures cost plan participants hundreds of millions of dollars in lost retirement savings, he claims.
The two New York Life retirement plans hold a combined $4.3 billion and cover nearly 30,000 people, according to the complaint.
The case is one of dozens of recent lawsuits challenging financial companies that include affiliated investment products in their 401(k) plans. Several companies have signed multimillion-dollar settlements, including Reliance Trust Co. ($39.8 million), McKinsey & Co. ($39.5 million), SunTrust Banks Inc. ($29 million), Fidelity Investments ($28.5 million), BB&T Corp. ($24 million), and Deutsche Bank ($21.9 million).
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Cohen Milstein Sellers & Toll PLLC represents the proposed class.
Chipotle Mexican Grill Inc. has agreed to pay $15 million to resolve class claims that the restaurant chain improperly failed to pay overtime to management trainees based on a controversial U.S. Department of Labor overtime expansion rule, according to a motion filed Friday in New Jersey federal court.
In what would end a legal battle that has stretched across the country, plaintiffs and former Chipotle employees Carmen Alvarez and Asher Guni urged the court to sign off on the agreement, citing the risks of further litigating “novel” legal issues surrounding the DOL rule and a Texas federal court order barring the agency from implementing it.
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The overtime rule, which was slated to take effect in December 2016, would have doubled the salary threshold for executive, administrative and professional workers to be exempt from overtime pay requirements. The DOL’s revision raised the salary threshold from $23,660 to $47,476 a year and created an index for future increases.
Several months after U.S. District Judge Amos Mazzant blocked the DOL from enforcing the rule, Alvarez in June 2017 initiated the action alleging Chipotle had misclassified her and other so-called apprentices as exempt from overtime pay requirements. Alvarez claimed that they were entitled to overtime pay under the DOL rule.
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Against that backdrop, the parties reached a settlement that is expected to benefit about 4,838 workers, the brief said. The proposed collective comprises people who worked as apprentices in New Jersey from June 7, 2014 to July 15, 2019, and in all other states — except for California, New York and Texas — from June 18, 2017 to Aug. 25, 2020, the brief said.
The plaintiffs are represented by Justin M. Swartz and Melissa Lardo Stewart of Outten & Golden LLP, Joseph M. Sellers of Cohen Milstein Sellers & Toll PLLC and Glen D. Savits of Green Savits LLC.
The complete article can be accessed here.
Lawsuit cites product executive’s qualms over figures provided to advertisers
A Facebook employee warned that the company reported revenues it “should have never made” by overstating how many users advertisers could reach, according to internal emails revealed in a newly unsealed court filing.
The world’s largest social media company has since 2018 been fighting a class-action lawsuit claiming that its executives knew its “potential reach metric”, used to inform advertisers of their potential audience size, was inflated but failed to correct it.
According to sections of a filing in the lawsuit that were unredacted on Wednesday, a Facebook product manager in charge of potential reach proposed changing the definition of the metric in mid-2018 to render it more accurate.
However, internal emails show that his suggestion was rebuffed by Facebook executives overseeing metrics on the grounds that the “revenue impact” for the company would be “significant”, the filing said.
The product manager responded by saying “it’s revenue we should have never made given the fact it’s based on wrong data”, the complaint said.
“Facebook knew for years its potential reach was misleading, and concealed that fact to preserve its own bottom line”
Lawsuit against Facebook.
Several other employees echoed his concerns, with one writing that the “status quo in ad reach estimation and reporting is deeply wrong”, according to the filing, parts of which had been initially sealed largely on the grounds that they were commercially sensitive for Facebook.
The lawsuit, which was filed in northern California in 2018 by a small-business owner, alleges that Facebook knowingly included fake and duplicate accounts in its potential reach metric, misleading unwitting advertisers.
It cites research showing Facebook had suggested potential reach in certain US states and demographics that was greater than the actual populations. A Financial Times investigation in 2019 found similar discrepancies in Facebook’s ads manager, an online tool to help advertisers build campaigns.
The NAACP, the prominent civil rights organisation, has filed a federal lawsuit against Donald Trump, his attorney Rudy Giuliani and two white supremacist groups over their role in the deadly January 6 siege on the US Capitol.
The lawsuit underscores how the former president’s legal woes are far from over, even after he was acquitted at the weekend of inciting an insurrection following a five-day Senate impeachment trial.
Trump is already facing a criminal probe in Georgia over his efforts to overturn the result of the presidential election there, as well as a wide-ranging investigation in Manhattan into the finances of the Trump Organization.
The attorney-general in the District of Columbia has not ruled out charging Trump for his role in the January 6 riots.
Filed on Tuesday morning in the Federal District Court for the District of Columbia, the NAACP lawsuit alleges that Trump, Giuliani, the Proud Boys and the Oath Keepers violated a 19th-century statute when they interrupted the formal certification of Joe Biden’s electoral college victory.
The 1871 Ku Klux Klan Act was passed in response to “KKK violence and intimidation preventing members of Congress in the South during Reconstruction from carrying out their constitutional duties”, the NAACP said.
The NAACP jointly filed the case with civil rights law firm Cohen Milstein Sellers & Toll on behalf of Bennie Thompson, a Democratic congressman from Mississippi. The NAACP said Hank Johnson, a Democratic congressman from Georgia, and Bonnie Watson Coleman, a Democratic congresswoman from New Jersey, intended to join the lawsuit as plaintiffs.
“January 6 was one of the most shameful days in our country’s history, and it was instigated by the president himself,” Thompson said. “His gleeful support of violent white supremacists led to a breach of the Capitol that put my life, and that of my colleagues, in grave danger.”