Lawsuit-Encouraging Bill on Governor’s Desk

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Legislation making it easier for plaintiffs’ lawyers to file pay equity lawsuits passed the Legislature last week and now awaits action by the Governor.

AB 1209 (Gonzalez Fletcher; D-San Diego) seeks to publicly shame employers for wage disparities that do not violate the law. Throughout the legislative session, it has been opposed as a job killer by the California Chamber of Commerce and a coalition of employer associations and local chambers of commerce.

Current Law

In 2015, the CalChamber and California Legislative Women’s Caucus celebrated compromise legislation that modernized the state’s equal pay law and was touted as the strongest such law in the nation.

The current law makes plain that the standard for equal wages is “substantially similar work,” not just the job title or description. It also carefully allocates the litigation burdens between the employee and employer.

Ideally, an employee must prove he/she is performing substantially similar work and is receiving unequal wages. The burden then shifts to the employer to establish a legitimate factor—such as education, experience, seniority, merit or geography—for the wage disparity.

An employer that cannot show a legitimate reason for the wage gap has violated the law.

AB 1209

AB 1209 requires many private employers and nonprofits to collect data on salaries of all well-paid white collar employees. The statistics for each job title or classification must be analyzed and recategorized according to whether the job duties are substantially similar. Businesses would deliver the data to the Secretary of State to be posted on a publicly accessible website.

Legitimate reasons for pay differentials would not be highlighted in the database.

Smokescreen

As pointed out in a recent opinion piece, “By using the smokescreen of transparency, the bill author and her plaintiffs’ attorneys allies aim to unravel the carefully structured compromise. In effect, the legislation would require employers to serve up reams of data that attorneys need to establish a case. What a gift!”

(“Why blow up a good deal on equal pay?” by CalChamber Policy Advocate Jennifer Barrera and Kara Bush, director of state government affairs for the Computing Technology Industry Association, appeared in The Sacramento Bee on August 30.)

Plaintiffs’ Attorneys React

Just two days after the Assembly gave final approval to AB 1209, the Sacramento Business Journal (paywall) reported that plaintiffs’ attorneys were anticipating new business:

But at least one member of the California Employment Lawyers Association has said he will proactively use the database to pursue wage disparity cases.

“By posting this on the Secretary of State’s website, the government is basically giving us (plaintiff lawyers) the data we need to go in there and hammer companies,” said Galen T. Shimoda, attorney owner at Shimoda Law Corp.

Although the wage data cannot form the sole basis of a lawsuit, he believes the database will help set him “on the right track.” And while the purpose of the bill is not to spark litigation against large companies, Shimoda believes the government understands that litigation is a part of the corrective force needed to address wage disparity.

“With AB 1209 providing true statistics, it’s almost like the government is saying, ‘Here’s the basis, litigators—go for it, start filing,’” he said.

Action Needed

The CalChamber is urging members to contact the Governor and ask him to veto AB 1209.

Staff Contact: Jennifer Barrera

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Jennifer Barrera
About Jennifer Barrera
Jennifer Barrera, senior policy advocate, works with the executive vice president in developing policy strategy and represents the CalChamber on labor and employment, taxation and legal reform issues. Before joining the CalChamber in September 2010, she worked at a statewide law firm that specializes in labor/employment defense. She also advised small and large businesses on compliance issues, presented seminars on employment-related topics, and authored articles in human resources publications. Barrera earned a B.A. in English from California State University, Bakersfield, and a J.D. with high honors from California Western School of Law.