What is the most dangerous question in your workplace?

In the private sector, the most dangerous question often is: “How much are you being paid?”

While the U.S. Congress fiddles, New Jersey Gov. Chris Christie recently signed into law a  bill making it illegal for New Jersey employers to retaliate if a worker discloses job pay information when the disclosure is made for the purpose of investigating whether someone is being paid unfairly. Job pay information includes workers’  job titles, occupational categories, pay and benefits, and status as members of protected categories.

Nearly half of all workers nationally are either contractually forbidden or strongly discouraged from discussing their pay with their colleagues, according to a 2011 report by the Institute for Women’s Policy Research Institute (IWPR).

Even when women have the same title as men, they tend to earn less and the disparity widens if women are Latino or African American.

Senate Majority Leader Loretta Weinberg, D-Teaneck, is quoted as stating: “If we are serious about pay equity, we have to allow workers to freely discuss their job conditions … By allowing employees to ask their coworkers about their salaries, benefits or working conditions, we open a door for those who believe they are being treated unfairly to learn the truth and get their fair share.”

Paycheck Fairness

The NJ law mirrors the proposed Paycheck Fairness Act,  legislation that was passed by the U.S. House of Representatives in 2009 but was blocked by Republicans in the U.S. Senate. The act, which was reintroduced this year, would close loopholes in the federal Equal Pay Act of 1963 and provide additional incentives for employers not to discriminate in pay.

A 2010 report from the US Census Bureau reported that for every dollar a man earned, a woman only earned 77 cents–for equal work production. As women get older, this wage gap widens. The National Women’s Law Center reports that when women start working–between ages 15 and 24–the wage gap is relatively small. Yet by the time they start to reach the critical years leading to retirement, ages 45 to 64, women are earning only 71% of what men do.

Discrimination (rather than differences in occupations, industry, experience or education) is believed to be responsible for about 40 percent of the wage gap.  According to the IWPR, in the federal government, where pay rates are transparent and publicly available, the gender wage gap is only 11 percent.

At the current rate, it is projected that the wage gap will not disappear for 45 years.

Wal-Mart may have dodged the bullet for alleged systemic sex discrimination dating back at least a decade.

Last week a federal judge in San Francisco denied class certification in a statewide class action lawsuit filed by five female Wal-Mart employees in California on behalf of 150,000 past and present female workers in that state who  allegedly were denied equal treatment in pay and promotions.

This is the second defeat for plaintiffs seeking to file class action lawsuits against Wal-Mart on a state or regional basis. Wal-Mart won dismissal of a lawsuit in October that sought to represent female Wal-Mart workers in Texas.

 The U.S. Supreme Court last year rejected a 12-year-old class action lawsuit filed by six female employees of Wal-Mart on behalf of  1.6 million past and present female workers around the country. 

What’s left for the plaintiffs?

Class action lawsuits often are the only realistic way of addressing systematic discrimination by corporations because of  the high cost of litigation, the defendant’s “deep pockets,”  and the relatively paltry amount of damages typically available in individual cases.

Underwhelmed

Senior U.S. District Judge Charles R. Breyer ruled the California lawsuit failed to meet the  U.S. Supreme Court’s criteria for a collective legal action, including evidence of a company policy or decisions by higher-ups that affect all workers in the class. He the statistics “still do not reflect significant proof of a general policy of discrimination.”

Judge Breyer concluded the following evidence from the plaintiff’s is “underwhelming”:

• About three-quarters of the stores paid women, on average, the same hourly rates as men. (Note: of course, this means that a quarter of Wal-Mart stores pay women, on average, a lower hourly rate than men. PGB)
• Eighty-six female Wal-Mart employees in California described personal experiences of discrimination  – that represents only one woman for every 1,745 members of the proposed statewide class. (It’s unclear what number would be sufficient  for class action status- PGB)
• The plaintiff’s produced evidence that Wal-Mart’s then-chief executive, Thomas Coughlin, in a 2004 meeting attended by district managers who approve pay and promotional decisions, said the key to success in choosing leaders was “a single focus to get the job done,” and that “men are better at focus.”
• The plaintiffs said they had evidence of disparities throughout California and biased statements by top managers.

The U.S. Supreme Court ruled unanimously in June 2011 that the original lawsuit against Wal-Mart in 2001 failed to show any company-wide policy or attitude of discrimination  and said there were too many women in too many jobs at Wal-Mart to wrap into one lawsuit. The high court overturned lower court decisions that allowed nationwide class-action status.

Judge Breyer said the California lawsuit “is essentially a scaled-down version of the (nationwide) case with new labels on old arguments.” He said the plaintiffs challenged “the discretionary decisions of hundreds of decision-makers,” which, according to the U.S. Supreme Court, cannot be the basis of a class-action suit.  

Breyer said the remarks attributed to former Wal-Mart CEO Coughlin may have come from an outside consultant and were made after the period covered by the lawsuit.

Breyer, 72, was appointed to the federal bench in 1997 by then-President Bill Clinton.  His brother is U.S. Supreme Court Chief  Justice Stephen Breyer.

Dodged a Bullet?

At one point, Wal-Mart, the nation’s leading retailer, was concerned about potentially serious liability for alleged sex discrimination.

In  2010, the New York Times published an article on a 1995 memorandum issued by Wal-Mart’s then counsel, Akin Gump Strauss Hauer & Feld,  that reported widespread gender disparities in pay and promotion at Wal-Mart and Sam’s Club stores.

The NYT reported the memo said that “women employed by Wal-Mart earned less than men in numerous job categories, with men in salaried jobs earning 19 percent more than women..”

By one measure, the memo states “. . . men were five and a half times as likely as women to be promoted into salaried, management positions.” Furthermore, in 1993, men employed by Wal-Mart as department managers were paid an hourly rate 5.8 percent higher than women in those positions. 

The Memo estimated that Wal-Mart’s potential legal exposure in a class-action sex discrimination suit was $185 million to $740 million for 1993 alone.

The  overall disparities in job assignments, the memo states, were “statistically significant and sufficient to warrant a finding of discrimination unless the company can demonstrate at trial that the statistical disparities are caused by legitimate, nondiscriminatory factors.”

At this point it appears that Wal-Mart has dodged that bullet.

Wal-Mart was ”pleased” by California Judge Breyer’s ruling and said it has a had a  “strong policy” against discrimination in place for many years.