Compliance

Pfizer and Google were both hit with million-dollar fines over gender discrimination allegations

Both cases highlight how employers are facing scrutiny of their HR practices due in part to calls by employees and the government for more accountability.
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4 min read

Two large employers, Pfizer and Google, were recently hit with million-dollar fines over allegations of gender discrimination at their companies.

Pfizer agreed to a $2 million settlement with the federal government for allegedly underpaying a group of female employees, while Google was ordered by a New York jury to pay more than $1 million in damages to an employee who accused the company of pay discrimination.

The fines represent a small fraction of both companies’ balance sheets. Still, they highlight how companies may run the risk of costly litigation if employers and HR pros don’t find effective ways to address gender bias and discrimination in their workplaces.

Why Pfizer and Google were fined. Ulku Rowe, an engineering director in Google’s cloud unit, sued the company for pay discrimination and retaliation in September 2019.

A complaint filed with the US District Court for the Southern District of New York alleged Rowe was hired at a lower level, and compensated less “than her similarly situated male peers.” Furthermore, the complaint alleged Google retaliated against Rowe after she voiced concerns about discriminatory actions, as she was passed up for a promotion that was given to a “less qualified man.”

Though a jury found that Google retaliated against Rowe, and discriminated against her on the basis of her gender, it did not conclude that she was paid less than male colleagues, in violation of New York’s pay equity law. Google was ordered to pay more than $1 million in damages to Rowe.

“We disagree with the jury’s finding that Ms. Rowe was discriminated against on account of her gender or that she was retaliated against for raising concerns about her pay, level, and gender,” Courtenay Mencini, a Google spokesperson, told HR Brew via email. “We prohibit retaliation in the workplace and publicly share our very clear policy.”

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Separately, the Department of Labor’s Office of Federal Contract Compliance Programs (OFCCP) announced on Oct. 16 that it had reached a conciliation agreement with Pfizer for underpaying female employees at its New York City location. The OFCCP found “Pfizer discriminated against 86 females in professional positions” from January 2015 to December 2016, paying them less than comparable men.

As part of the agreement, Pfizer will pay $2 million to the affected employees, as well as conduct a compensation analysis for affected groups, and adjust salaries should significant gender-based disparities be found. While the DOL reported that Pfizer was revising its compensation system, the company’s media relations team disputed this in a statement to HR Brew, saying it “does not reflect the terms that the parties reached.”

Zoom out. Both cases highlight how employers are facing scrutiny of their HR practices due in part to calls by employees and the government for more accountability.

The conciliation agreement with Pfizer is part of a broader push by the OFCCP to hold government contractors accountable for pay inequities. This is the first time an employee took Google to court over pay discrimination allegations since the company ended its forced arbitration policy—which had kept many employee disputes from ending up in court—following walkouts. The federal government passed a law last year ending forced arbitration for sexual assault or harassment claims.

Nine out of the ten highest settlements in class employment discrimination last year were related to gender bias lawsuits, including a $118 million settlement Google reached in a separate pay discrimination case, according to a report from law firm Duane Morris.

Quick-to-read HR news & insights

From recruiting and retention to company culture and the latest in HR tech, HR Brew delivers up-to-date industry news and tips to help HR pros stay nimble in today’s fast-changing business environment.