Oracle, DOL Dig in Heels Over $400 Million Pay Bias Claims (1)

Dec. 5, 2019, 9:29 PMUpdated: Dec. 5, 2019, 11:39 PM

While the Labor Department said Dec. 5 that its lawsuit against Oracle Corp. is “the biggest enforcement case” it’s ever brought against a federal contractor, Oracle claimed the agency’s allegations of systemic pay discrimination are “entirely divorced” from how the company determines worker pay.

Lawyers for the DOL said during an administrative trial in California that Oracle takes a centralized, “top-down” style in determining employee compensation, which violates federal contractor obligations that require anti-discrimination steps to be taken, “by directing, overseeing, and failing to correct pay discrimination.”

This isn’t the case, attorneys for the technology company said. Oracle’s compensation decisions are decentralized, and determined by vertical lines of business instead of horizontally organized job function, and executives “were not, and are not, sitting in their offices in Redwood Shores poring over the details of hiring decisions Oracle makes on a weekly basis.”

The Labor Department’s Office of Federal Contract Compliance Programs alleges that Oracle owes women, Asian, and black employees $400 million after paying them less than their male, white counterparts, and placing them in lower-paying jobs, at the company’s headquarters. The contentious litigation has lasted almost three years, and an administrative trial began Dec. 5 in San Francisco to hear the merits of the case.

Oracle’s chief executive officer, Safra Catz, was in the courtroom to hear opening statements Dec. 5.

The hearing comes as several major technology companies, including Google, Microsoft, and Twitter, defend pay discrimination lawsuits filed by women.

The company and the agency have sparred over procedural and evidentiary issues, and accused each other of alleged misconduct involving witness intimidation and “secret” pacts with private plaintiffs’ attorneys who also are representing workers accusing Oracle of pay bias.

“Oracle is a federal government contractor that must comply with the anti-discrimination laws and regulations enforced by the Office of Federal Contract Compliance Programs,” a DOL spokesperson said in an email Dec. 5. “At the hearing, OFCCP intends to prove that its in-depth analyses and other evidence demonstrate pay discrimination against women, Asians, and African Americans at Oracle’s headquarters. OFCCP looks forward to presenting its case to the Administrative Law Judge,” the spokesperson said.

The case became so contentious that Administrative Law Judge Richard M. Clark scolded the parties at times. In March, he wrote in one order that he expected Oracle, the agency, and their attorneys to “behave in a professional, courteous manner and avoid unnecessary and contentious litigation strategies that are often mistaken for zealous advocacy.”

More recently in November, he criticized Oracle’s “scorched earth” approach to litigation as either a “cynical attempt to delay hearing and waste government resources or a form of economic assistance to its lawyers, who Oracle is paying to pour over OFCCP’s submissions and compile this list of every conceivable objection.”

The hearing will continue over the next two weeks.

The case is OFCCP v. Oracle Am., Inc., Dep’t of Labor A.L.J., No. 2017-OFC-00006.

(Adds agency comment in the eighth paragraph.)

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

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com

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