We Can’t Litigate Ourselves To Equity: The Limitations Of Pay Equity Lawsuits

Welcome to my weekly Q&A feature. (Scroll down to find the Q&A.)

If this is your first time here, welcome. I spend a fair amount of time speaking at events and conferences. At the end of my presentations, I leave space for audience members to ask questions—tough questions, brave questions, you name it. The level of candor and curiosity always inspires me, and I want to share that sentiment with you. Each week I pick one question that I believe others would find most instructive and publish my response to it here.

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Transparency: a behind-the-scenes look at my day-to-day.
Inclusion: bringing others along on the journey.

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The Efficacy Of Pay Equity Lawsuits

Question:

What is the significance of pay discrimination lawsuits? Are they effective at getting companies to close the gender pay gap?

Answer:

If you’ve been watching this space, then you’re likely familiar with some prominent pay equity cases from the past several years. There was the protracted $600 million class-action lawsuit against Google, the $400 million case against Oracle, and the 8,000+ women-strong case against Microsoft—to name only a handful.

Millions of dollars poured out of these cases. Thousands of workers had their economic livelihoods upended. The employees fighting for pay equity had invested in themselves to increase the value of their labor through education, experience, and tenacity. When they realized they were not being paid equitably, they risked retaliation to speak up for their rights. They—like all workers—deserve equitable wages.

I also fought for pay equity—twice, and won. (Although my fight didn’t take place in a court of law.) As a breadwinner mom of a family of four, I understand the terror of putting you and your family’s financial well-being on the line in the face of inequity.

So at a micro level, pay equity litigation matters.

If we want to achieve equity for all, then we need to treat the disease. We need to create a system that is equitable by default.

At a macro level, however, these lawsuits are nothing more than sprinkles on a brownie. They look propitious, but the real substance comes from something else. In other words, we can’t litigate ourselves to equity.

Here’s why.

The Limitations Of Pay Equity Lawsuits

1. Pay equity lawsuits are reactive. The scarring of inequity has already begun by the time someone files a claim. A reactive system is inequitable by default.

2. The burden of proof lies with the employees (i.e. those experiencing inequity). Under the Equal Pay Act of 1963, an employee must use their time, their resources, and their energy to prove a prima facie case by showing:

A wage discrepancy between employees of opposite genders
The employees of different genders performed equal work of equal effort
The employees shared similar work arrangements

3. Workers who speak up for pay equity risk retaliation and in many cases, can’t remain anonymous.

4. Pay is the symptom, not the disease. And therefore, a pay equity lawsuit treats the symptom of inequity. It doesn’t cure the disease. It’s akin to taking Tylenol for a tumor or putting a band-aid on a broken bone.

If we want to achieve equity for all, then we need to treat the disease. We need to create a system that is equitable by default. This forthcoming system (forthcoming because I’m an optimist) will contain several levers, one of which is a true pay equity law—similar to what Iceland and Canada have in their books.

Attributes Of A True Pay Equity Law

When I say we need a “true pay equity law,” I’m referring to these attributes:

Companies over a certain size (100 or more employees is a reasonable threshold) must earn an equal pay certification by proving they pay all employees the same amount for work of similar value. This framework shifts the burden of proof from employee to employer.
Federal regulators must hold companies accountable to pay equity by issuing penalties for non-compliance.
To obtain a pay equity certification, companies must apply the intersectional lens to data: gender PLUS race/ethnicity PLUS age. (Side note: Google’s 2021 diversity report takes an intersectional approach to data disaggregation, however, it doesn’t provide data on employee pay.)

Mandating pay equity, while not the end-all-be-all, would unlock $512 billion in economic value for the US and help us tangibly measure progress toward a more equitable world. (Because we won’t achieve true, sustainable pay equity until we achieve equity of opportunity, equity of performance appraisals, equity of education, etc.)

Pay Equity Lawsuits Indicate Broken Workplaces

Pay equity lawsuits reflect broken workplaces. Resources go to waste when we retroactively patch holes in the employee lifecycle. A better approach? How about systems that get in front of pay decisions before the damage of inequity occurs, and before that damage leaks into the economy.

We must restrain from confusing progress with equity. Yes, pay equity lawsuits matter for the individuals involved. However, in an equitable system, these lawsuits wouldn’t exist. As we approach Equal Pay Day 2022, let’s start envisioning what a world of equity might look like.