Last week, a California state court in San Francisco ruled that a California Equal Pay Act class action against Google Inc. has survived the pleading stage. The California Equal Pay Act currently requires equal pay for employees who perform “substantially similar work” when viewed as a composite of skill, effort and responsibility. The 2016 amendment to the Equal Pay Act also prohibits employers from relying on the employee’s prior salary to justify a sex-based difference in salary. Plaintiffs allege in their amended complaint that Google relies on gender stereotypes and has a company-wide policy of relying on former salary history in setting pay and assigning jobs. These allegations were critical to the court’s decision to allow the case to proceed as a class action.

Background

In September 2017, three former female Google employees filed a class action alleging systemic pay disparity between men and women at the company. The court originally granted Google’s motion to dismiss and strike class allegations, but granted Plaintiffs leave to amend. The amended complaint narrowed the scope of Plaintiffs’ class definition from “all women employed by Google in California” to “all women employed by Google in California” who have held a “Covered Position,” which included job levels within 30 positions, including engineers, business systems managers, sales specialists and pre-school teachers. In addition, the amended complaint alleges that Google has a company-wide policy of relying on former salary history in setting pay and assigning jobs, despite its purported knowledge that this policy adversely affects women.  Plaintiffs alleged that this policy, as well as stereotypes about what jobs women can and should do, perpetuated pay disparities at Google.

Google’s Second Attempt to Defeat the Class Action

In response to the amended complaint, Google again sought to dismiss the class allegations and the class-wide intentional discrimination claim. Google argued that the amended class definition was still too broad as Plaintiffs themselves did not hold certain Covered Positions and accordingly failed to plead facts that female employees in these Covered Positions performed substantially similar work to men, the crux of a fair pay claim under California law.

In addition, Google argued that Plaintiffs’ intentional discrimination claim was based on their own individual experiences, rather than a company policy that could form the basis for a class action. The court rejected both arguments.

The Court’s Decision

In last week’s order, the court held that Plaintiffs’ amended complaint pled sufficient facts to proceed. The court was unpersuaded by the fact that Plaintiffs did not hold jobs in certain Covered Positions because Plaintiffs successfully alleged a company-wide policy that applied to all Google employees in Covered Positions. By alleging a uniform policy – the reliance on prior pay to set salaries and determine job levels – Plaintiffs adequately pled an ascertainable class that encompassed all Covered Positions.

For similar reasons, the court held that Plaintiffs’ intentional discrimination claim was sufficient to survive the pleading stage. The court found that Plaintiffs’ reference to Google’s alleged policy of considering prior pay and acting on stereotypes about women was sufficient to demonstrate at the pleading stage that Plaintiffs’ intentional discrimination claim was not unique to them. Moreover, the court accepted Plaintiffs’ allegation that Google knew or should have known of the pay differences between men and women in Covered Positions based, in large part, on the company’s annual audits and the U.S. Department of Labor’s Office of Federal Contract Compliance Programs’ (OFCCP) audit that revealed gender pay disparities last year.

The court must assume the truth of Plaintiffs’ allegations about Google’s policies and practices for purposes of ruling on Google’s initial motion to dismiss, and its ruling therefore reflects the relatively low threshold needed for Plaintiffs to survive an effort to dismiss the class claims at the outset of the case. However, the pleading stage is only the first hurdle that Plaintiffs must clear. Plaintiffs will need to demonstrate that Google actually maintains the allegedly common discriminatory policies and practices as to the Covered Positions in order to certify a class of employees in the Covered Positions.