Certified: Thousands of Oracle Women Permitted to Proceed as a Class in a Significant Win for Gender and Pay Discrimination Actions

Last week, the San Mateo County Superior Court in Jewett v. Oracle granted the representative plaintiffs’ motion for class certification, permitting plaintiffs to proceed as representatives of a class of over 4,100 women. The case alleges systematic underpayment of women, in violation of California’s Equal Pay Act (EPA), Labor Code 1197.5 and California’s Unfair Competition Law, Business & Professions Code 17200.

While the ruling does not reach the merits of the allegations, it nevertheless is a crucial victory and an important breakthrough in pay and sex discrimination class action cases. In recent years, plaintiffs have sometimes met resistance in trying to bring class claims of systemic gender-based discrimination. For example, in Huang v. Twitter, the California courts declined to certify a class of approximately 135 software engineers in an action alleging that Twitter’s discretionary promotion policy had a disparate impact on women in violation of California’s Fair Employment and Housing Act. Similarly, in Moussoris v. Microsoft, the federal district and appellate courts declined to certify a class of approximately 8,600 women in technical and engineering roles in an action alleging that Microsoft’s policies and practices had a disparate impact on women with respect to compensation, promotions, and performance evaluations, in violation of Title VII of the Civil Rights Act and Washington state law. In both cases, the courts cited to Wal-Mart v. Dukes in concluding that commonality could not be established because the discrimination that the women faced was a result of an individualized exercise of discretion, so the inquiry was not suitable for a class case. In a sense, the employers were able to avoid liability on a classwide basis by granting decision-makers the type of discretionary authority that perpetuated the very structural, implicit biases that these cases sought to challenge.

In the instant case, plaintiffs’ claims differed in two notable ways. First, the claims were brought under California’s EPA, which is a strict liability statute – meaning there is no requirement to prove intent, discriminatory animus, or motive for the identified pay disparity. Second, plaintiffs contended that much of this pay disparity arose from Oracle’s use of prior salary at jobs before Oracle, an impermissible factor with respect to pay disparity under the statute (see Labor Code 1197.5(a)(1)(D)(4)).¹

In support of their claims, Plaintiffs submitted evidence that Oracle has a detailed, company-wide system of job codes that groups employees by job function, job specialty, job family, and responsibility level. Plaintiffs subsequently elicited Person Most Qualified (PMQ) testimony that individuals within job code share basic skills, knowledge, and abilities, and similar levels of responsibility and impact. Plaintiffs also introduced expert reports establishing that: (1) work within Oracle’s specific job codes were substantially equal with respect to skills, effort, and responsibilities; and (2) that women working in the same job codes as men receive less base pay, fewer bonuses, and lower stock compensation, to a statistically significant degree, such that the discrepancy could not be explained by job definition, tenure at Oracle, tenure in position, job performance, years of job experience, or location of work site.

The Superior Court found that Plaintiffs’ theory of recovery was suitable for class-wide proof because Oracle’s job codes would allow for comparison of salary data between individuals that performed work similar in skill, effort, and responsibility. The Court concluded that Plaintiffs’ evidence supported a finding that Oracle employed a top-down, centralized compensation system that was appropriate for classwide resolution.

Oracle argued that there was sufficient variance within each job code with respect to the specific duties of each employee that a comparison at the job code level was improper. However, the Court concluded that this was inconsistent with Oracle’s own PMQ testimony, and the EPA’s requirement that jobs only share similarities with respect to a composition of skill, effort, and responsibility performed under similar working conditions. Further, at the certification stage, Plaintiffs need only offer a theory that is susceptible to common proof, which they had done here.

Oracle also argued that it was entitled to present individualized evidence with respect to each and every class member to attempt to establish that there was a “bona fide” factor responsible for that woman’s lower pay compared to every man in her job code who is paid more. The Court rejected Oracle’s argument, finding that to be “bona fide” and applied “reasonably,” any job-related factor that Oracle could point to would have to have been applied consistently with respect to employees performing the same work. As the Court explained: “it is not reasonable or consistent with the purposes of the EPA to permit an employer to pick and choose factors inconsistently and idiosyncratically to justify disparate pay decisions for employees performing substantially similar work.” Although Jewett is not directly responsive to the decisions in the Twitter, Microsoft, and Wal-Mart cases, the Jewett order rebuffs the notion that an employer can insulate itself from classwide gender discrimination claims with respect to pay disparity by letting decision-makers operate with unchecked discretion.

Jewett thus marks an important step in bridging the gender pay gap as it provides employees with a simpler mechanism to bring their claims. Specifically, the Jewett order has solidified the California EPA as a pathway forward to challenging systemic gender discrimination in pay on a classwide basis.

If you believe you are being paid less because of your sex, contact Bryan Schwartz Law.

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1 The 9^th Circuit recently reiterated that reliance on prior pay history does not insulate an employer from liability under the federal EPA, which this firm has blogged about here.^↩

U.S. Supreme Court Rules against Defendants’ Attempts to Shut Down Employment and Consumer Class Action Suits by Paying Off Named Plaintiffs

On Wednesday the U.S. Supreme Court handed a rare 6-3 victory to consumers and employees seeking to bring class claims in Campbell-Edwald Co. v. Gomez. The Court was tasked with deciding whether a defendant can properly dispose of a class case by offering full relief to the named plaintiffs in an effort to render moot their individual claims and thus get rid of the entire case. Such efforts by defendants to dispose of class cases by paying off the named plaintiffs have become commonplace in consumer and employee class actions.

The case involved a consumer class action under the Telephone Consumer Protection Act (TCPA) against a Navy contractor hired to send recruiting text messages to young people. The TCPA prohibits sending such marketing text messages without the cellular phone user’s prior consent. Jose Gomez, who had not provided consent and nonetheless received the Navy’s recruiting text message, filed suit on behalf of a putative consumer class seeking treble statutory damages for Cambell-Edwald’s knowing and willful violation of the TCPA, as well as an injunction against further unsolicited text messages by Campbell-Edwald.

Before Mr. Gomez’s deadline to file a motion for class certification, Campbell-Edwald filed an offer of judgment to Mr. Gomez under Federal Rule of Civil Procedure 68. Mr. Gomez did not accept that offer. However, Campbell-Edwald contended that by providing Mr. Gomez with an offer of complete relief, his claim became moot. Because his claim was mooted before he moved for class certification, Campbell-Edwald argued, the putative class claims also became moot. The district court rejected those arguments and ruled in favor of Mr. Gomez on that issue. The Ninth Circuit Court of Appeals agreed.

At the Supreme Court, Justice Ginsberg wrote for the majority, joined by Justices Kennedy, Breyer, Sotomayor, and Kagan. (Justice Thomas concurred in the judgment but did not sign Justice Ginsberg’s majority opinion.) Ultimately, Justice Ginsberg resolved the mootness question according to fundamental principles of contract law, stating that “an unaccepted settlement offer has no force. Like other unaccepted contract offers, it creates no lasting right or obligation. With the offer off the table, and the defendant’s continuing denial of liability, adversity between the parties persists.”

In reaching that conclusion, Justice Ginsberg addressed a 2013 decision of the Court, Genesis HealthCare Corp. v. Symczyk, 133 S.Ct. 1523 (2013), a collective action brought by employees under the Fair Labor Standards Act. In that case, the named plaintiff had conceded in the lower courts that her individual claim was rendered moot when she did not accept her employer’s Rule 68 offer to settle her individual claim. Based on that early concession, a five-justice majority held that without a named plaintiff’s live individual case, a class suit could not be maintained. The four dissenting Justices, led by Justice Kagan, argued that the employee’s unaccepted offer of judgment could not properly moot a case.

Justice Ginsberg thus adopted the reasoning of Justice Kagan’s dissent in Genesis HealthCare and secured a majority with the votes of Justices Kennedy and Thomas. The decision was a rare victory for employees and consumers before a Supreme Court that has often been hostile toward class action lawsuits. See previous blog posts here, here, and here. Justice Kennedy’s decision to join the majority in deciding not to dispense with class actions as a means to vindicate vital statutory rights – including job protections--should delight employee and consumer advocates.

The argument advanced by Chief Justice Roberts and the dissenters is a cynical one in its claim that a lawsuit brought on behalf of a class is rendered moot if the defendant offers to pay off the named plaintiffs, even if those named plaintiffs refuse the payment. The Chief’s contention that no live case or controversy exists because a defendant offers to resolve one of potentially thousands of putative class members’ claims cannot be taken at face value.

Practically speaking, what company would not pay a few thousand dollars to the named plaintiffs to escape the possibility of multi-million dollar exposure? Simply put, a seemingly small point of procedural law could have spelled the end of vigorous enforcement for numerous employee and consumer protections enacted by Congress.

Although Justice Ginsberg confined her majority opinion to a relatively narrow set of facts—suggesting the outcome could be different if Mr. Gomez had in fact accepted full payment—employees, consumers, and those who advocate on their behalf can breathe a collective sigh of relief that class actions will live to fight another day.