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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 menearning an average 84 cents for every dollar men
make. (That number is 78 cents on the dollar nationwide.) That gap is even larger for Californias 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 bills 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 companys 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. Thats why every

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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

Dont 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

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