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Cisco Will Pay Millions to Settle Compensation Bias Claims (2)

March 16, 2020, 7:50 PMUpdated: March 16, 2020, 9:41 PM

Cisco Systems Inc. will pay $2 million in lost wages and interest, and “at least” $2.75 million in salary adjustments over five years, to settle Labor Department allegations that the company paid women and minority employees less than white and male colleagues in similar jobs.

The alleged pay discrimination dates back to at least August 2011, the DOL’s Office of Federal Contract Compliance Programs said in a statement. The full settlement document wasn’t immediately available.

The $2 million in lost wages will be paid to employees who worked at Cisco’s San Jose, Calif. location, while the $2.75 million in pay-equity adjustments will be provided to employees nationwide, according to the agency.

“We of course believe in taking accountability to make things right for our employees,” Cisco’s Chief People Officer Francine Katsoudas wrote in a blog post on the settlement. “And we have agreed to pay a total of $2 million to 1,505 Hispanic, African American, and female current and former employees who OFCCP believes were adversely affected in San Jose during that period,”

Katsoudas said the OFCCP’s audit found that “adjustments were needed” at Cisco’s San Jose location, but that audits of 22 other Cisco locations across the country “found no issues.”

Cisco settled the claims through an “early resolution conciliation agreement,” which exempts the company’s U.S. locations from OFCCP audits for five years, as long as it routinely submits hiring, pay, and other employment data to the agency. Time Warner Cable, Bank of America, Goldman Sachs, and other federal contractors have entered into similar agreements with the office, which enforces equal employment opportunity laws for businesses with federal contracts.

“This agreement ensures that employees from Cisco Systems Inc. are compensated fairly, and will prevent similar issues from happening again at any of its facilities,” Jane Suhr, OFCCP’s Pacific regional director, said in a statement.

(Updated with additional reporting throughout.)

To contact the reporter on this story: Paige Smith in Washington at psmith@bloomberglaw.com

To contact the editor responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com

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