Google to Shell Out $118M to Settle Pay Bias Class Action

Google has agreed to pay $118 million to resolve a California state court class action brought on behalf of over 15,000 female former employees who accused the tech giant of underpaying women.

The agreement was unveiled last week – it resolves nearly five years of litigation in San Francisco Superior Court. In addition to the fund, which covers approximately 15,500 California-based female Google employees spanning hundreds of job titles, Google has agreed to have independent experts analyze its hiring and pay equity practices.

"As a woman who's spent her entire career in the tech industry, I'm optimistic that the actions Google has agreed to take as part of this settlement will ensure more equity for women," one of the four lead plaintiffs, Kelly Ellis, said in a news statement. "Google, since its founding, has led the tech industry. They also have an opportunity to lead the charge to ensure inclusion and equity for women in tech."

Ellis worked as a software engineer for Google, while the other named plaintiffs – Holly Pease, Kelli Wisuri and Heidi Lamar – held positions in business systems, sales and Google’s children’s’ center.

Attorneys for the women lauded the pact.

"Google has long been a technology leader. We are delighted that in this settlement agreement and order, Google is also affirming its commitment to be a leader in ensuring pay equity and equal employment opportunity for all of their employees," said Altshuler Berzon LLP partner James M. Finberg.

Another member of the employees' legal team, Kelly Dermody, a partner at Lieff Cabraser Heimann & Bernstein, said, "Plaintiffs believe this settlement advances gender equity at Google and will be precedent-setting for the industry."

A spokesperson for Google said in a statement that the company is "very pleased" with the deal, noting that while "we strongly believe in the equity of our policies and practices," resolving the longstanding dispute "without any admission or findings was in the best interest of everyone."

The lawsuit, filed in September 2017, accused Google of paying women less than men for equal or similar work.

The women said the company slotted female employees into lower "salary bands" than those of men, put them in lower-paying positions and failed to promote them. They claimed that the problem stems from Google's former practice of asking candidates about their salary history and that it persists because the company has done nothing to correct its course.

According to the women, Google's conduct ran afoul of California's Equal Pay Act, Unfair Competition Law and Fair Employment and Housing Act.

The four named plaintiffs notched a victory in May 2021 when San Francisco Superior Court Judge Andrew Y.S. Cheng agreed that a class action was the best way forward for their claims.

The class covers women who worked as engineers, product and program managers, systems administrators and sales and childcare employees, according to court filings.

The women had argued that employees who shared a job code did substantially similar work but that the men were paid more than the women. Google disagreed, saying that its job codes are broad and that employees are often working on different products and have different areas of expertise. But Judge Cheng found in his grant of class certification that "for work to be substantially similar under the EPA ... jobs do not need to be identical or require exactly the same duties."

States including California and New York have amended their equal pay laws in recent years in ways that lower the bar for workers to make claims — the initial burden in equal pay litigation — and raise the bar for employers to defend against claims after the burden has shifted to them.

During the course of the women's suit, for example, California amended its Equal Pay Act to bar employers from asking for applicants' salary history.

And effective in 2016, California changed the law to allow workers to claim pay discrimination when compared to colleagues who do "substantially similar work" instead of "equal" work, as the federal Equal Pay Act requires.

A preliminary approval hearing on the settlement announced Friday is slated for June 21

The plaintiffs and the class are represented by James M. Finberg, Eve H. Cervantez and Corinne F. Johnson of Altshuler Berzon LLP and by Kelly Dermody, Anne B. Shaver and Michelle A. Lamy of Lieff Cabraser Heimann & Bernstein LLP.

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