Almost three in ten cases before the Equal Employment Opportunity Commission (‘EEOC’) are gender discrimination cases, with 29.3% total charges made in 20141. The news is full of high-profile cases, from the lawsuit filed by Tina Huang, a former engineer, against her ex-employer Twitter, to the very public case of Ellen Pao who filed a $16 million complaint against venture capital firm Kleiner Perkins, alleging gender discrimination and retaliation following a report of sexual harassment (Pao lost the case and ultimately withdrew her filed appeal). While a company certainly cannot stop an employee from filing a gender discrimination suit, perhaps it can prevent women from feeling that a lawsuit is the only solution. Or, at a minimum, if the company does find itself in the unfortunate position of being in a courtroom, it can present viable arguments that it makes every effort to truly give women the same opportunities as men.
One of the ways that organizations can protect themselves is through a comprehensive, documented, substantive gender diversity initiative. Analogous to an affirmative action plan, gender diversity initiatives that are built into an organization’s strategic plan and that set forth measureable goals and benchmarks can help in the defense of a gender discrimination lawsuit. If an employee files such a lawsuit, that employee has to prove that she was in fact discriminated against based on gender. If the company has a meaningful gender diversity initiative in place – and it follows the program, which is key – it bolsters the argument that gender discrimination did not take place. Let’s say a female middle manager claims that she did not get a coveted promotion because she is a woman. There are many elements of the claim that she has to prove. But, in defending itself, if the employer can demonstrate that it has a gender diversity initiative, that the initiative is documented and measured, that through the initiative, the company provides substantive training to assist women in developing leadership skills, and that women are supported, mentored, sponsored and promoted, it is certainly a powerful argument against that employee’s claims. It shows a true commitment to the success and advancement of women. But, conversely, if the company has nothing in place, or worse, has something in place, but fails to implement it properly, that could be damaging to the company’s defense2. Simply put, having a meaningful gender diversity initiative positions a company better in a courtroom and/or in an alternative dispute resolution forum like mediation or arbitration in the event that it is sued.
The collorary to this is in the context of Employment Practices Liability Insurance, which generally covers employers against discrimination, harassment, wrongful termination and other employment claims that are not covered by other types of business insurance. It is typically a condition to obtaining such insurance that the company have legally compliant policies and procedures, set forth in writing, that have been distributed to employees. In addition, insurers want to see that employment training has been provided and that all employment problems have been corrected. If the employer has demonstrated that it has taken these steps, it is more likely to be insured and the insurance company may even offer premium discounts3. It naturally follows that a company’s ability to obtain this type of insurance would be strengthened by a well-developed, comprehensive and integrated gender inclusion initiative and that an insurer would be even more comfortable issuing such a policy knowing that any case it would have to defend would have an additional layer of argument and protection.
While there are many financial, innovative, business generating and other value-based benefits to having a substantive gender diversity initiative in any organization, one that may be overlooked is the importance of having and following a meaningful plan as a safeguard in the event the company is sued for gender discrimination. And that is certainly one potential benefit that companies cannot afford to ignore.
1 Catalyst. Quick Take: Sex Discrimination and Sexual Harassment. New York: Catalyst, May 25, 2015.
2 Butler v. Home Depot, Inc., 1997 WL 375285 (N.D. Cal. 1997) (“. . . evidence that Home Depot failed to implement its diversity program would appear to be relevant and admissible . . .”); see also, http://smallbusiness.findlaw.com/employment-law-and-human-resources/are-employers-required-to-have-affirmative-action-plans.html#sthash.tQ81G7mm.dpuf (“Once a company adopts an [affirmative action] policy, they should follow it to avoid lawsuits from potential employees.”).
3 “Understanding Employment Practices Liability Insurance”, www.foxrothschild.com.