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Qualcomm will pay $19.5M to end systemic gender bias suit in pre-litigation deal

By Pamela Wolf, J.D.

Under a remarkable deal proposed prior to any litigation, Qualcomm would pay $19.5 million to resolve class allegations of systemic gender discrimination against female Science, Technology, Engineering, and Math (STEM) and related production or program management employees in pay and promotion. The settlement also provides programmatic relief worth about $4 million aimed at ensuring equal opportunity for women at Qualcomm. The putative class includes about 3,290 female long-term current and former employees.

The plaintiffs allege that they experienced and witnessed systemic gender discrimination stemming from common employment policies, practices, and procedures related to pay and promotion. Due to these policies and practices, the plaintiffs said they were paid less and promoted more slowly than their similarly-situated male counterparts. “The discrimination was especially acute for working mothers, who faced additional discrimination on the basis of caregiver responsibilities,” according to the memorandum in support of the unopposed motion for preliminary approval of the $19.5 million deal.

The complaint alleges violations of Title VII, the Equal Pay Act, the California Fair Employment and Housing Act (including the Pregnancy Discrimination Leave Law and the California Family Rights Act), and the California Equal Pay Act, as well as derivative claims for relief under PAGA.

Deal came before the lawsuit. In a quite unusual scenario, the parties reached the settlement agreement before the lawsuit was formally initiated and prior to any in-court litigation. They “engaged in extensive investigation and exchange of information about Plaintiffs and the proposed classes” even before pursuing material settlement discussions, the memorandum states. “This voluntary interchange enabled the Parties to conduct meaningful and intense negotiations with a keen eye towards the strengths and weaknesses of their positions and the value of the claims. In particular, both parties completed expert statistical analyses that informed their views of the case and ultimately helped set the parameters for settlement talks.”

The settlement negotiations in the case were facilitated by “a highly-experienced and nationally-esteemed employment mediator.” The deal came after months of “protracted negotiations” and two full days of mediation.

Flawed job leveling and compensation system. “Qualcomm’s levelling scheme, composed of job families, job codes, and rewards groups, overly disaggregates jobs based on features other than the requisite amount of skill, effort, and responsibility, resulting in pay differences between workers performing equal or substantially similar work,” according to the plaintiffs. The company used common compensation systems that predicate compensation based on the flawed levelling system, biased market-based valuations of female employees, and a system of performance, stock, and bonus ratings “that encouraged reliance upon illegitimate, subjective, and non-quantitative factors.” These systems purportedly have a disparate impact on female employees, said the plaintiffs, “by causing unjustified widespread, uniform, statistically significant disparities in base pay and incentive pay as well as the closely tied metrics of stock and bonus ratings.”

Sponsorship promotion model. Qualcomm also systemically denied women promotions and promoted them more slowly because of sex-based disparate impact discrimination and disparate treatment in the promotions process, the plaintiffs contend. The company allegedly failed to post open positions that were available for putative class members seeking either promotion or opportunities for professional development that would facilitate promotion. Qualcomm instead relied on a sponsorship model in which employees could seek promotion, obtain plumb assignments, and, in many cases, attend trainings, only with the support of their male managers. “The effects of this model in the context of Qualcomm’s male-dominated culture are apparent in the trend towards reduced proportions of women at each successive level of Qualcomm’s hierarchy,” according to the plaintiffs.

Female caregivers hit even harder. The plaintiffs also assert that they were subjected to common policies, patterns, and practices pertaining to caregiving responsibilities for children. Qualcomm allegedly maintained policies that discouraged taking leave and unduly penalized female caregivers. The company’s policy or practice of “24-7 responsiveness” permitted prorating the ratings for employees on flex-time schedules, without taking into consideration their productivity, and disparately rewarded employees who could work late, regardless of whether they were higher performers or more productive. These and other practices “exacerbated the impact of pay and promotion discrimination against working mothers,” according to the plaintiffs.

Net settlement proceeds. The plaintiffs estimate that if the court approves the $5.85 million in fees, costs, service awards ($50,000 for each of seven named plaintiffs), and other features of the proposed settlement, the net amount remaining in in the $19.5 million settlement fund would be about $13,005,500. The average pre-tax recovery for class members would be about $3,953.04.