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Will Uber Set the Model for Organizations Facing Employee Discrimination Litigation?

Will Uber Set the Model for Organizations Facing Employee Discrimination Litigation?

In March of 2018, the ride-sharing giant Uber settled a $10 million discrimination lawsuit to be paid out to over 400 software engineers. That settlement received judicial approval in November of 2018. In addition to the monetary payout, however, perhaps the most far-reaching impact can be found in the non-monetary terms of the settlement.

Allegations from two former employees and one current employee prompted the lawsuit. The three Latina engineers alleged that Uber paid their white and Asian male colleagues more than female and minority employees. The employees filed the lawsuit against Uber in U.S. District Court, Northern District of California on behalf of 420 employees – 285 women and 135 ethnic minorities – who claimed that Uber was in violation of the Equal Pay Act. The plaintiffs also filed in California Superior Court under the Private Attorneys General Act in California.

The settlement requires Uber to undertake 20 new business practices under the heading of programmatic relief. Here are some of the highlights:

  • Uber shall continue to monitor progress toward its diversity objectives (including but not limited to those in the Covington recommendations) and report progress at least quarterly to its executive leadership team and members of its Board of Directors. Highlights shall be shared with Uber employees quarterly by the Chief People Officer. “The Implementation of a new pay structure including compensation adjustments and other new employment practices.”
  • Uber shall continue to publicize its diversity representation to its work force at least twice annually.
  • Every member of Uber’s executive leadership team shall participate in a semi-annual business review with Uber’s CEO, which includes the organization’s diversity representation, pipeline, diversity growth progress, and actions taken to increase the representation of women and under-represented minority groups.
  • Uber shall retain APT Metrics or a similar expert who specializes in industrial organizational psychology (the “Independent Consultant”) to consult with Uber in reviewing and modifying, if appropriate, the following for the Engineer I and II, Senior Engineer I and II, and Staff Engineer positions. The consultant will work with Uber to develop a process and standards for setting a new hire’s starting compensation within the job code’s pay range established by Uber after its consideration of market surveys and market supply and demand and a new-hire compensation offer work-up form to document new hire compensation decisions.
  • Uber shall monitor the base salary, all bonuses and promotions for adverse impact based upon race/Hispanic status (for any group that comprises at least 2% of the work force) and gender at the conclusion of each PERF cycle. Any promotions that were made off cycle shall be included in the analysis for the subsequent cycle.
  • Uber shall offer a mentor to every Class Member. All mentors shall be trained on their roles, Uber’s expectations and techniques for success. Uber shall invite feedback from mentees on the engagement and effectiveness of their mentors and shall use that feedback to guide further training, mentor feedback and mentee assignments.
  • Uber’s Human Resources team shall organize calibration groups that facilitate comparison of individuals who are performing similar work in the same Vice President organization (or a combination of such organizations if Uber deems it appropriate).
  • Uber shall maintain and make available to all employees written policies on maternity, paternity, and parental leave; accommodation for breastfeeding and the location of lactation rooms; flexible work hours; and the procedure for requesting a reduced schedule with reduced pay.

A full list of the agreed upon terms from the settlement can be viewed here under section 3.

Will Uber’s new terms create a template for other organizations facing employee discrimination litigation? We can anticipate that companies, legal counsel, and disgruntled employees all will be reviewing this case carefully for precedents.

In the meantime, Uber continues to face legal challenges. In Canada, an Ontario Court ruled that the arbitration clause found in contract agreements between the company and its drivers was “illegally outsourcing an employment standard.” The clause states that drivers cannot ban together to form a class-action lawsuit and rather need to sort out any complaints with the company directly.

In California, over 12,000 drivers have filed a lawsuit stating Uber is ignoring their requests for arbitration. Perhaps the outcome in Canada will carry-over to the U.S.

One thing is for certain, organizations should look to follow suit on Uber’s initiative and seek an outside consultant to help monitor pay equity within their organization. The equal pay movement in the U.S. is only going to grow. If you have not already started, it’s time to get ready to address equal pay in your organization to avoid a situation that could affect your company’s bottom line and reputation.

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