Jones Day’s ‘Black-Box’ Pay Prevails for Now as Women Drop Suit

Jones Day’s system for paying attorneys—so mysterious that some have dubbed it a “black box"—is one of the winners after five women lawyers recently dropped their lawsuit against the firm.

The women had alleged that pay decisions are controlled exclusively by Jones Day Managing Partner Stephen Brogan, based on subjective factors that aren’t disclosed to the firm’s lawyers. The “black box” waters down female lawyers’ compensation, they claimed.

But five of six women who brought the suit told a federal judge March 11 they’re withdrawing it. Their attorneys and Jones Day representatives declined to say whether the case had been settled.

That frees the “black box” from some potential legal jeopardy, though criticism of it will likely continue.

“When you have a system with no transparency, it’s reasonable to believe that the system is a product of systemic bias,” said Avi Kumin, an employment discrimination lawyer and partner at Katz, Marshall & Banks.

Former Jones Day lawyer Katrina Henderson is continuing the suit.

While the case had centered largely on the “black box,” the women dropped their systemic pay discrimination claims in December. They said their review of pay data that Jones Day was forced to turn over didn’t support allegations of widespread pay disparities.

Still, many jurisdictions are worried enough about possible disparities across industries that they’re pressing for more disclosure about pay systems.

States like California, Washington, Colorado, and Maryland have recently started requiring employers to provide some general pay information during the hiring process. California is taking an additional step, forcing most employers to turn over pay data broken down by sex and race.

But those laws will have little impact on Jones Day’s pay practices, Kumin said. Like other employers, the firm isn’t required to tell employees how much their colleagues are making or to disclose how it makes compensation decisions.

“I don’t think it’s unusual to have black-box compensation systems in big law firms,” he said. “What made the allegations unique is that it was one individual who was largely responsible for the system.”

Shrouded in Secrecy

Jones Day is known for being particularly guarded about its inner workings, including how it recruits and pays attorneys.

“Our partner compensation system is confidential and based on each partner’s relative contribution to clients and the Firm,” Jones Day says on its website.

Jones Day also is among several Big Law firms that have been on the receiving end of discrimination claims in recent years.

In two lawsuits—the action filed by the six women and a separate case that was later settled—former Jones Day lawyers described a secretive pay system in which Brogan calls the shots. They also said the firm’s managing partner instructs attorneys at the firm not to discuss pay with their colleagues.

The firm in 2019 settled a lawsuit by former partner Wendy Moore, who complained about the lack of transparency in how attorneys are paid. She said she was retaliated against after complaining about what she called a male-dominated “fraternity” culture at Jones Day. Moore received the capital she put into the firm as part of the settlement.

The National Labor Relations Act protects certain activities in the workplace, including employees sharing information about their pay. Although the NLRA covers law firm associates and other workers that aren’t unionized, the protections don’t extend to partners.

Brogan, the seventh managing partner in Jones Day’s 127-year history, is unique when it comes to Big Law leaders. He makes many of the firm’s decisions with little or no input from its more than 900 partners.

“We are governed by a single Managing Partner, who promotes unity, consistency, and dedication to client interests,” according to the firm’s website.

More Lawsuits

Jones Day is still fighting another lawsuit from a pair of former associates, married couple Mark Savignac and Julia Sheketoff. They allege Savignac was fired for complaining about gender inequity in the firm’s parental leave policy.

A pair of women lawyers also are suing Morrison & Foerster over the firm’s maternity leave policy, alleging they were punished for taking time off related to pregnancies. That case appears headed to trial.

Some other firms have opted to settle.

Chadbourne & Park, which was acquired by Norton Rose Fulbright, paid more than $3 million in 2018 to resolve a lawsuit by three former partners who accused the firm of systematically underpaying women. Ogletree Deakins and Proskauer Rose have settled similar suits on undisclosed terms in recent years.