How to ward off some class-action pay-bias suits: Grant managers limited discretion to set pay

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in Compensation and Benefits,Discrimination and Harassment,Human Resources

Do your managers have limited discretion in setting pay? If so, you may have a built-in way to prevent large class-action lawsuits over equal pay.

It’s all because of last summer’s big Supreme Court decision in Wal-Mart, Inc. v. Dukes. In that case, the giant retailer was sued by women who claimed that by allowing local managers discretion in promoting and setting pay rates for store employees, women ended up being paid less.

The women argued that because managers were mostly men, they presumably favored other men in promotions and pay.

The Supreme Court said that by giving local managers some discretion to set pay, the retailer couldn’t have discriminated against a group of similarly situated women. By definition, the women were not similarly situated, since no one corporate policy determined their promotional chances or pay rates. Those decisions were up to store managers.

Of course, sometimes managerial discretion can be ...(register to read more)

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