Recent Legal Developments in Pay Equity and Transparency

Episode Notes

Transcript

Erin Connell:

One of the key things that I often tell clients is to level the job before it’s posted. You level the job, not the person.

Matt Greer:

If you are like me, you’ve probably have been curious about the latest developments regarding pay equity and transparency. In my conversation with expert attorneys Erin Connell and Anne Shaver, we define what’s really meant by pay equity and transparency and explore recent legal developments and trends in those areas. Along the way, Anne and Erin share practical tips for employee and employer attorneys to take into consideration. We’ll also examine some recent cases and jurisdictions where these issues are developing. Hello, hello, hello and welcome to the ABA Labor and Employment Law Podcast. I’m your host, Matt Greer, and I’m looking forward to spending some time with you learning about what’s going on in the wide world of labor and employment law from distinguished practitioners in our field. A quick word about me if you are curious, I’ve been involved in the ABA Labor and Employment Law section for over a decade and want to give a special shout out to the state and local government bargaining and employment law committee, my home committee.

I encourage you if you’re interested in section membership to find a committee. That’s a great way to get involved. In my day job. I work for the Washington State Public Employment Relations Commission, the agency charged with impartially, administering and enforcing Washington’s public sector collective bargaining laws. I wear a few hats in my role at including mediator, hearing examiner, arbitrator and trainer, always as a neutral, probably like you. My focus area is a niche and I would say my area is a niche within a niche in the labor unemployment law universe, and I’m excited to broaden my horizons through these episodes. On today’s episode, we are very fortunate to have Erin Connell and Anne Shaver join us to discuss pay equity and transparency. Erin represents employers as a partner at the Orrick Law Firm, and Anne represents employees as a partner at Lieff Cabraser Heimann & Bernstein. It’s truly an honor having them on the podcast to share their knowledge and wisdom with us. Be sure to check out their full bios in the show notes. Thank you so much for joining us, Anne and Erin, welcome to the show. How are you both doing today?

Erin Connell:

Doing great. Thanks Matt. Happy to be here.

Anne B. Shaver:

Thanks, Matt. It’s great to be with you.

Matt Greer:

Great. So let’s go ahead and get into this pay equity and transparency issue. I think that this is really topical and interesting. I know we were thinking about our listeners, some of them may not have heard of this or may have heard of it, but not really don’t fully understand what the issues are that go along with pay equity and transparency. So I thought we’d start off by just asking you in your views as an employer and employee advocates, what is pay equity? What does it mean to you? So I dunno. Erin, do you want to start us off?

Erin Connell:

Sure, I’m happy to Matt. So when I think of pay equity, I think of it in terms of how that concept is framed, the state and federal equal pay laws. So I think of it as the concept of paying employees equally for equal work or substantially similar work depending on the jurisdiction unless there is a legitimate non-discriminatory, job related justification for the difference. And I think it’s important to distinguish pay equity from a related concept that we hear a lot about, which is the pay gap. I think these two concepts often get conflated, but they’re different. The pay gap is the concept of looking at just the average pay to use a gender example, the average pay of women compared to the average pay of men, but without consideration to the type of work that’s performed or the specific jobs held. So we often hear that the gender pay gap in the country is approximately 80 cents to the dollar and pay equity issues certainly could contribute to that, but the pay gap is a much broader and I think more nebulous concept.

Matt Greer:

Yeah, interesting. Thanks Erin for drawing that distinction. It’s interesting. We’ll probably get into a little more detail. Anne, what about you? What do you think about when you think about pay equity and transparency?

Anne B. Shaver:

Yeah, the first thing that comes to my mind is actually a joke that I’d love to share with you and I’m going to give credit to Eve Cervantes from the LER Bergon firm for sending this to me on the national equal payday. But it goes like this, men tend to choose higher paying careers like doctor, engineer, lawyer or CEO while women choose lower paying careers like female doctor, female engineer, female lawyer or female CEO. So the concept there is not too dissimilar from what Erin articulated in terms of the legal framework. It’s simply equal pay for substantially similar work irrespective of one’s gender or race or other protected category.

Matt Greer:

Yeah, great. Thanks for laying out that framework for us. So I guess I’ll turn to you, I mean, what are you seeing right now in terms of the pay equity issues that are out there you think that we should start off our conversation with, but what’s going on out there in those worlds?

Erin Connell:

Sure, I’ll chime in. You already hit on I think what is probably the biggest development right now, which is pay transparency. And when we talk about pay transparency, it’s again a broad concept. It really refers to making pay more transparent the opposite of pay secrecy. And so there are a lot of laws right now that are popping up all over the country and all over the world, even in the EU where these laws are actually making it a requirement that employers disclose information about pay. So a little less than a decade ago, we saw the first wave of pay transparency laws, which were largely prohibitions against employers prohibiting employees from talking about pay or from asking questions about pay or retaliating against employees for talking about pay. The new laws that we’re seeing over the last few years are actually requiring affirmative disclosures about pay. The biggest one is the requirement that employers disclose pay ranges on job postings. Some of the laws also require pay disclosures to applicants in certain circumstances and to employees. And I am a big proponent of pay transparency. I think it helps with pay equity both because it does make pay more transparent, but it also forces employers to pay more attention to the issue.

Anne B. Shaver:

Yeah, absolutely. And before I chime in on pay transparency here, I just want to take a step back and say how delighted I am to be on this podcast with Erin. Erin and I have known each other for a long time. We were youngins coming up in the ABAs Equal Employment Opportunity Committee together, and then eventually we were co-chairs of that committee together and worked together really extensively on programming and what the conference was going to look like and so forth. And we’ve also litigated opposite each other on these very types of cases. So we’ve known each other for a long time. I’ve got a lot of respect for you, Erin. I’m very happy to be on the show with you.

Erin Connell:

Oh, thank you, Anne. I feel the same way

Anne B. Shaver:

On pay transparency. I agree. This is such a huge step forward for us as a society. Informational asymmetry is one of the number one reasons that employees get stuck either in jobs that don’t suit them or jobs that don’t pay as well. And the real just behind pay transparency laws is to try to level that playing field by giving employees information that beforehand only the employer had about what the range of pay is for a given job. Now it’s certainly complicated and nuanced and I’m sure we’ll dive into some of the ways in which these laws are and are not working, but generally speaking, pay transparency is something we’ve been advocating for a very long time and is a huge step forward in giving employees the critical information they need to be able to advocate for equal pay.

Erin Connell:

I think pay transparency is one area where even though we are on opposite sides of litigation, we are in agreement on a lot of things when it comes to pay transparency. I agree with Anne’s comments. And again, just to reiterate, I think one of the big benefits of pay transparency is it forces employers to focus on what they’re willing to pay for their jobs. And when you have to put it on a job posting, it’s public, it’s for the world to see. And so in many ways these laws are self-policing long before the authorities or the plaintiffs are going to come knocking. If you’re not complying with pay transparency laws, it’s in the media. There are websites that have developed around sort of naming and shaming employers who aren’t complying, and it’s really, I think also having a big cultural change in how people think about pay. Historically, it was a private concept, people didn’t talk about pay that was confidential. And I think that these laws are helping to change attitudes in that regard.

Matt Greer:

Yeah, it’s really interesting. I think you’re right. I mean there is the culture of we don’t talk about money or at least in some aspects of the culture that’s kind of seen as not an appropriate thing to do. So it’s really interesting to see these laws opening up opportunities that maybe weren’t there for whatever reason. So I guess, I don’t know, would it be worth talking about, are there some of those specific laws that kind of, hey have some experience and how they’ve been applied and if they’re having any impact looping back into the whole bigger pay equity issues? Do you see anything out there right now?

Anne B. Shaver:

I am not aware of any studies that have compared before and after results in a given location before a law was enacted and after a law was enacted in terms of measuring with data the results of these laws. I have seen data in my own private litigation that suggests that it has an enormous impact. For example, employers stop relying on an employee’s prior pay to determine their pay at the time of hire that men and women’s rate of pay at higher starts to equalize. And that’s of course because we have historical bias and prejudices baked into what men and women are earning writ large in our culture. And so if going into a new job, the employer is basing what you’re going to be paid on what you’re earning in your old job that’s going to self perpetuate. So that has been interrupted by some of these laws in a number of states, and I think I have seen that that is having an effect. I don’t know. Erin, are you aware of any studies measuring the effects of these laws?

Erin Connell:

I am not aware of any studies yet. I think it’s still pretty early to tell, and it’s also correlation and causation. It’s hard to pinpoint if increases in pay equity are a direct result of the explosion of pay transparency. But what I will say is similar to you in my own practice, what I see, I think there’s just a lot more attention being paid on these issues. And it’s not just on pay, but pay transparency laws are forcing employers to focus on their job and their job architecture and the whole way that they structure their workforce. In my practice, I’m spending a ton of time right now on job leveling and career levels and job families and job profiles and just how jobs are structured. And I think that’s really, really critically important because again, as I was talking earlier about pay equity and the pay gap, making sure that employees are paid fairly is not just about making sure that people who hold the same job are paid fairly, but making sure that people are getting slotted into jobs in an equitable way. Because the career level at which you start your career at a company is going to have a huge impact going forward. So the focus on job architecture and what the pay ranges are going to be for particular jobs and the focus on starting pay is huge because similar to where you start from a job leveling perspective, your starting pay is going to have a dramatic impact on your pay throughout your career trajectory. So I think that it is having an impact in a positive way.

Anne B. Shaver:

Yeah, I couldn’t agree more in terms of the importance of the overall job architecture and looking not just at whether employees are paid similarly within the same job, but how employees are getting slotted into those jobs and those levels at the time of hire. So what we’ve seen a lot of in the plaintiff’s bar is that when we do pay analyses and we look at are men and women in the same job being paid similarly, even if the answer to that is yes, there is still a gross disproportion in the types of jobs and the levels at which women are being hired into compared to men with similar experience and educational qualifications and so forth. So you take candidates who have the same qualifications and they’re not getting slotted in the same place. And as Erin said, that has ramifications over the course of the career. Once you start behind, you can’t really catch up. And so it’s important to look at leveling at time of hire, occupational job families at time of hire and promotional velocity over time between men and women.

Erin Connell:

I completely agree. One of the key things that I often tell clients is to level the job before it’s posted, you level the job, not the person. And I definitely think that pay transparency helps with that because one of the first things that we saw is that for employers who were not doing that, they would post pay ranges that spanned hundreds of thousands of dollars. And when you look behind the scene, they say, well, that’s because we haven’t decided on the job level yet. It could be to use a tech example, it’s a software engineer, but they hadn’t decided if it was going to be software engineer 1, 2, 3 or four, they were going to make that decision based on the candidate. Well, I think that’s where you can get into a slippery slope of potential channeling or steering issues, and it is much better practice from my perspective to level the job before it’s posted, and that also is going to mean a narrower pay range because it’s going to be based on the specific level.

Anne B. Shaver:

Can I just mention one more thing about the job steering or channeling since you raised that Erin specifically in tech is in addition to the issues that you mentioned about the type of job and the level, there’s another big elephant in the room here in tech, which is contractor status versus full-time employee status, because a lot of tech companies rely heavily at this point on contractors to do certain types of work. And what we have seen is that the population of those contractors tends to be more women and more people of color, whereas the population of the full-time employees tends to be more men and more white folks. So that’s another sort of area to look at to see if there’s a disparate impact in terms of who is getting hired as a contractor and who’s getting hired as a full-time employee.

Erin Connell:

Yeah, I will also say that there are large contractor populations among tech companies, but it’s broader than just the tech sector. And it’s certainly an area that I think the government agencies, including out here in California, the California Civil Rights Department is focused on just this past year, they started collecting pay data from California employers, not only from their W2 employees, but also from their labor contractor population. So it is an issue that they’re focused on particularly.

Matt Greer:

Yeah, very interesting. I’m curious, I know that pay transparency, there’s salary, but then a lot of compensation is more than salary, and so I’m curious, especially in the tech world where maybe the majority of compensation is maybe not salary, how that works in the transparency piece.

Anne B. Shaver:

Well, Matt, you’ve absolutely hit the nail on the head and you’ve identified something that I was hoping we would circle back to in this conversation, which is that one of the main limitations from my perspective on these pay transparency laws is that many require only a posting of the salary range or if it’s an hourly job, the hourly rate. And what we know is that the biggest deltas in pay are in bonuses and equity grants. So these pay transparency laws leave that totally unaddressed

Erin Connell:

From the employer’s perspective, the challenge, and I think a lot of the pushback, some of the earlier laws did contemplate covering other elements of pay, but there was a big pushback from the employer community because a lot of times just to take bonuses, employers don’t know what the bonus is going to be. A lot of it depends on company performance, it depends on employee performance. So the ranges necessarily would be hugely broad. And similarly with equity, equity is sort of its own unique concept. It can be a form of compensation, it can also be used as a retention, a method of retaining employees. It can also be used as a recruiting tool. So I do think there are some additional considerations when it comes to bonus and equity, and it’ll be interesting to see what happens both with the laws and in general.

Anne B. Shaver:

I mean, yeah, just on that point about equity, Erin, I think that this is a topic for advanced practitioners in our area, which is when you’re studying these things, is it proper to include equity in your models or not? We always include total comp from our perspective in order to be meaningful, it’s got to be total compensation, but there are arguments on both sides as to whether it’s appropriate to include equity for the reasons that you’ve identified her. And I think that that’s a fruitful area that we need to continue to have dialogue about and explore, including with our experts.

Erin Connell:

Absolutely. Equity is one of the most challenging things. I mean, when we do a pay equity study or an analysis, what we’re typically trying to see is are people paid equitably for work performed? We’re often doing it on an annual basis, but a lot of times equity grants either at higher or even refresh grants aren’t necessarily for work performed in that year. As I mentioned, they could have a retention or a recruiting aspect to them. So it is more complicated and it can also be very complicated in terms of how you quantify equity. And that’s the area of much debate. Is it at Grant, is it at Vest? That’s just one of the areas of dispute.

Anne B. Shaver:

Yes. And I have seen, I mean not to put too fine a point on it, but I have seen where the results of the regression model, whether you have statistically significant pay disparities or not actually turn on that point, are you measuring equity at time of grant or at time of vest? Absolutely. It’s an important issue. I mean, just to give an example of this as just a real world practical problem. Let’s say Erin and I are coworkers and we have the same job and we have the same salary and what have you, but I go out and I interview with another firm and they give me a really attractive offer. And so I come back to my firm and I say, I’ve got this other offer. What are you going to give me to make me stay? And the firm says, well, we’ll offer you this incredibly fat juicy set of stocks. Does that mean that now I am paid Anine equitably to Erin? Is that something that should be accounted for when modeling that decision? I don’t think it’s an easy answer, and I think it’s very fact specific. It depends a lot about on the company at issue.

Erin Connell:

I agree. It’s complicated and it’s one of the reasons why when doing pay equity analysis proactively for employers often analyze the different components of compensation separately for that exact reason.

Anne B. Shaver:

But I’ve got a question for you, Erin. You mentioned that one of the challenges on the employer side is that in terms of including bonuses in the Range Bloom listing, what a job pays in addition to salary, including bonuses, you mentioned one of the challenges was that employers often don’t know what bonuses are going to be because it depends on the company’s performance. Couldn’t you cure that by just offering a range of, say a percentage range, 1% to 3% depending on individual performance or something of that nature?

Erin Connell:

I mean, my point is just that maybe, but I don’t know that that solves the problem because I work with a lot of companies both in tech, also in financial services, and bonuses can fluctuate quite a bit year over year depending on company performance and a whole variety of things. So I just think that it’s hard to predict and maybe percentages is better than a dollar amount. It probably is, but I still think that it’s going to be a difficult thing for companies in certain sectors to predict year over year.

Anne B. Shaver:

Yeah, I can appreciate that. I think too though, from the employee perspective, it’s really important to set expectations there and to know this is what I can expect that in this particular job, bonuses tend to be, depending on how the company does, it could be nothing, be 0% up to 5% or what have you of my base salary. And with further clarification that where I fall within that percentage range is going to depend on my individual performance, for example. And that at least gives some guidelines or some set of expectations for employees so that they can compare what they end up with against it and ask, is there a problem?

Erin Connell:

I am quite sure that some jurisdiction is going to adopt some approach soon, and we’ll just have to see how it plays out.

Matt Greer:

So on that line, I mean, have you seen any kind of bellwether states out there or jurisdictions that are kind of getting more into the details of this and maybe being an outlier that may be worth keeping an eye on in case people are interested in following what’s happening?

Erin Connell:

Well, historically it seems like it’s always California. The expression is as goes California, so goes the nation. And sometimes it’s sort of an arms race between California and New York. But when it comes to pay transparency, Colorado has gotten way out ahead. So I think Anne’s home state, so I’m keeping an eye on what’s happening primarily in those three states, California, New York and Colorado.

Anne B. Shaver:

Yeah, absolutely. Really exciting things happening here as an employee advocate in the state of Colorado, Colorado got out ahead of the rest of the country in terms of pay transparency and requiring that not only do you sort of disclose pay ranges to applicants and post it with a job opening, but also to existing employees. And anytime there’s an opening within the company described as a promotional opportunity that you also post the salary for that. It actually prompted a very interesting backlash here in our state where certain employers either relocated or didn’t follow through with plans to build their Denver or Boulder office, but also as with the rise of remote work following the pandemic employers in Colorado started saying, well, this job can be done remotely from anywhere except Colorado as a way of trying to circumvent the regulations. And then of course, the local state agency jumped in and said, no, no, no, you can’t do that. But it’s been great to see my home state take the lead here.

Erin Connell:

The other interesting thing that I mentioned is that it’s not just here in the States. The EU passed a pay transparency directive. The directive is passed, but EU member states have until June of 2026 to comply. And I think that’s going to be really a big sea change there, where they’re going to be required to post pay ranges, impose salary, history bans, and other aspects that a lot of states here in the US already have enacted, but nothing like that exists in the eu. So it is global. It’s not just here in the United States.

Matt Greer:

Yeah, interesting. And prognosticating, the federal sector, given the federal politics is challenging to say the least, but I don’t know, do you get a sense there could be a national response to this or is that something that’s not on the radar at this moment?

Anne B. Shaver:

Oh, if I’m understanding you right, I think it absolutely is. I think that the federal government, I mean the Biden administration issued an executive order directing federal agencies to get in line on pay equity issues and Office of Personnel Management has issued some regulations around mandatory pay auditing and that agencies that use independent pay setting systems have to complete well, they have to at least initiate those audits, I think by October of this year and report to the federal government on their findings.

Erin Connell:

But in terms of legislation coming through Congress, I’m not necessarily holding my breath. I do think that there is quite a bit of activity at the federal agency level, the EEOC, certainly the O-F-C-C-P, which regulates the non-discrimination and affirmative action obligations of federal contractors. They’ve been very aggressive, I would say, in the pay space. And I think that’s probably going to continue.

Matt Greer:

I guess from my perspective as a labor relations collective bargaining kind of a background, I do keep an eye on the N-L-R-B-A little bit, even though it’s not my jurisdiction, but that’s kind relevant to some of the work I do. And I know that the general counsel with the NLRB has been pretty vocal about how employees have a protected national Labor Relations Act protection to discuss pay with their colleagues. That’s kind of protected, so dunno if it’s new or not, but it’s definitely been on the forefront it seems like, from that world.

Anne B. Shaver:

Yeah, I think that General Counsel Abruzzo has been focused on correcting for that informational asymmetry that I mentioned earlier across a number of spaces. So one is, as you mentioned, Matt, being able to discuss pay as a protected activity in and of itself, but another is general counsel’s position that confidentiality or nondisclosure clauses and employee agreements violate the act because it prevents it from being out there in the public, the facts of what happened and the employee’s ability to discuss it. So I think that that’s all, broadly speaking, in line with the goal of leveling the informational playing field.

Erin Connell:

I agree there is a lot of pressure on employers from all angles, the state laws that we’ve been talking about, the federal government agencies, the plaintiff’s bar, and also just their own employees and potential employees. I think that the importance of prioritizing pay equity from the standpoint of attracting and retaining talent just can’t be underemphasized. And I also think it’s just really important to keep in mind that when we talk about pay equity, it’s really not a static check the box exercise. It’s something that employers always need to be working towards, including because any particular employer’s pay equity picture is always changing because employees are always coming and going and changing jobs. And by definition, pay equity is a comparative concept. And so I think focusing on all these things that Anne and I have been talking about, job architecture, job leveling compliance with pay transparency laws, coming up with pay ranges, not just for compliance reasons, but for purposes of ensuring you’re paying people fairly are all just so critically important, not just from a compliance standpoint, which obviously is an important one, but as I am saying, from the standpoint of being able to attract and retain the best talent,

Anne B. Shaver:

Not to mention all the shareholder activity in this area.

Matt Greer:

Right.

Anne B. Shaver:

Oh, of course. I mean, there’s been a ton of shareholder initiatives and proposals around pay equity and pay transparency, and also some shareholder derivative lawsuits alleging that companies have made statements in their ESG, their environmental and social governance reports about their activities on this front, and then the reality hasn’t measured up. Those lawsuits have, by and large not been very successful, but it still demonstrates a lot of attention and focus in the area. Absolutely.

Matt Greer:

And I was curious, I mean this is maybe touching on it a little bit beyond what we initially talked about, but the extent that there’s the equity, diversity and inclusion efforts that some corporations and governments are looking at, is there an intersection with those efforts and these conversations? And I can imagine that gets complicated pretty quickly, especially given the political kind of environment behind that in some areas. I’m just curious if you have any thoughts on that Generally.

Erin Connell:

I mean, when you talk about diversity, equity, and inclusion, that includes pay equity. So there’s been so much that’s happened in the DEI space, particularly since the Supreme Court decision striking down the affirmative action programs at Harvard and UNC, even though that was not an employment case, it’s had a huge indirect impact in the employment space. With regard to DEI, we’ve seen a big backlash against DEI. We’ve seen a lot of litigation. I do think of pay equity a little differently than that because again, the pay equity laws go both ways. It’s about paying everybody equitably and making sure that they’re paid fairly, so they’re related, but I think it’s a little different in terms of the activity and the litigation and the controversy that we’re seeing in the DEI space. I think pay equity is a little different in that regard. Anne, what do you think?

Anne B. Shaver:

Yeah, I agree. I’m not aware of reverse discrimination lawsuits targeting pay equity initiatives. I think the majority of those cases have been around company announcements that, for example, they will have 30% of management level employees be people of color by 2025 or something of that nature. And so it’s more around the concept that how can you achieve that without discriminating based on race and who you’re hiring and promoting, rather than cases that make any sort of legal argument that performing pay equity analysis discriminates based on gender or on race. Because as Erin said, the goal of any such analysis is just that it’s equal pay for substantially similar work and so hard to see how that would run afoul of any of the anti-discrimination laws.

Erin Connell:

I agree. And it seems like every day there’s a new headline about companies scaling back on some of their DEI efforts. I haven’t read any headlines about people scaling back in the area of pay equity. At least they’re not announcing that.

Anne B. Shaver:

Yeah. But I think this is a really, it’s a very hot topic for our part of the bar, which is how do we continue to promote diversity, equity, and belonging or inclusion while recognizing that there is this very real risk because we’ve seen it play out in the past couple of years of being sued for reverse discrimination and how do companies achieve what they want to achieve? And that is so important, not just for employee morale and retention and hiring, but also we’ve just seen that as a business imperative, diverse companies perform better. So I think many companies now recognize that these sorts of initiatives and efforts are imperative, but how do they do that while mitigating the risk on the other side? It makes me so sad that we’ve gotten to this place as a country that has to be a hot topic of conversation in our bar, but there we have it.

Erin Connell:

No, it absolutely is. And in addition to counseling and litigating pay equity issues, the other big area that I spent a lot of my practice on is exactly this, working with companies on their DEI efforts who care about it, they prioritize it. There is an imperative not to do away with DEI programs altogether, but to make sure that they’re doing it lawfully and talking about it in a way that’s not going to put a target on their back.

Matt Greer:

Yeah, it sounds like challenging work and why your roles are so important as your advocacy roles there to kind of give good advice to your clients as they navigate those issues, which I imagine are very challenging at points. So thanks for sharing that. I think we’re getting a little bit close to the end of our time. So I wanted to see is there anything that you either wanted to share about that we haven’t talked about yet that you wanted to cover before we end? And then I’m going to give you one more chance after that if you have any tips or any kind of prognostications about the future of these issues to be looking forward to. So first off, is there anything that you want to before we move on to the tips piece?

Anne B. Shaver:

Yes. I think what we can’t ignore is the impact of artificial intelligence in this space already. And in the coming years, we are going to see an increasing reliance, at least by large companies on AI tools for all kinds of human capital management functions, from hiring to performance to analysis to promotion, decisions, setting pay, and so forth. And it just raises a whole host of complicated and interesting issues about how do we apply the laws here when it’s not human beings doing the decision making? It’s an algorithm. And I mean, what we know at least so far is that in theory, the laws don’t differ at all. It’s the same set of analysis regardless of whether it’s human decision making or machine decision making. But as a practical matter and in terms of litigation, it certainly raises a whole different set of issues from discovery through application on the merits. So that is a big area of focus in our bar and will continue to be.

Erin Connell:

I agree wholeheartedly that the explosion of ai, particularly in the employment arena, is just a huge game changer. It’s an area where the technology is evolving faster than the laws, and I think at the federal level, the federal agencies have really doubled down on existing laws. But this is another area where the states aren’t waiting for Congress and we see a lot of new laws working their way through state legislatures. Once again, Colorado taking the lead. They’ve already enacted a statute that hasn’t yet taken effect, but will regulate AI and employment, and that’s going to impact pay equity and DEI and pretty much every aspect of what we do.

Anne B. Shaver:

Yeah, there’ll need to be a whole other podcast on this topic, I’m sure, in short order.

Matt Greer:

I was going to say, it sounds like AI might be an issue in a lot of areas of practice, but it sounds like this one’s getting to the forefront fairly quickly here if this law’s already being introduced. So yeah, it’s interesting. Definitely always looking for podcast material, so might be discussing that again in the near future. Alright, so as we close out, I mean, I don’t know, do you have a tip for folks if they’re facing these issues, equity, transparency, issues that are coming up? I mean, do you have one thing that people could be thinking about to help them out as they kind of navigate some of these issues?

Erin Connell:

I mean, from my perspective, I just think that employers are grappling with a lot right now. There’s a lot of polarization in the workplace due to politics, the Middle East, the explosion of ai, all of that. But prioritizing pay equity I think is something that they should not lose sight of for all of the reasons that we’ve discussed. And it is something that you do need to pay attention to. I often tell clients, if you are relying on an annual pay equity analysis as your means for ensuring pay equity in your workforce, you are way behind because it is much more than that. You need to be focusing on all the things that we’ve been discussing, job architecture, job leveling, starting pay practices, equity bonus, all of those sorts of things. And it really is something worth prioritizing not only from a compliance and litigation risk mitigation standpoint, but also for purposes of retaining and attracting the best talent.

Anne B. Shaver:

So two things for me. The first is, I love what Erin said earlier about level the job, not the person. I think that that’s just a really nice little sound clip that we should just be repeating over and over. And then the second is for litigators watching cases in this space, I recommend following the Rasmussen versus Disney case, which is in the California State Court right now. It’s a pay equity class action that received class certification status last December is set for trial, I believe in 2025, and is litigating all the issues that we have talked about in this podcast, including discrepancies in pay between folks in the same job and level, but also reliance on prior pay and in setting pay at higher and how that impacts careers over time. So interesting case there, certainly one to watch.

Matt Greer:

Great. Yeah, thank you very much. It’s always nice to have something to look at. In some case we’ll be keeping an eye on if you’re interested in these issues. So I appreciate that. Thanks again and Erin for being here. I don’t know if we initially said this at the beginning, but this was one of our very first recordings actually, it is the very first recording. I’m not sure if it’ll be the first episode that’s released, but I want to especially thank Anne and Erin for being kind of the initial guests on the podcast. You did a great job and I really appreciate you sharing your thoughts and wisdom and tips for us. It’s really, really helpful and I’m sure our listeners appreciate it as much as I do. I know I learned a lot, and thank you for taking the time to join us. I hope you found the conversation as interesting and informative as I did.

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