The U.S. Department of Labor’s Office of Federal Contract Compliance Programs has reached agreement with JP Morgan Chase & Co., resolving allegations that the financial institution engaged in systemic compensation discrimination against female employees in certain professional positions, and establishes enhanced future compliance commitments.
The parties have submitted a proposed consent decree that is subject to approval by the Administrative Law Judge.
An OFCCP compliance review in 2012 found that JP Morgan Chase paid at least 93 females employed within its Investment Bank, Technology & Market Strategies unit, less than comparable men employed in the same positions. OFCCP filed suit against JP Morgan Chase with the Department’s Office of Administrative Law Judges in January 2017.
While not admitting liability, JP Morgan Chase will, as part of the overall agreement, pay at least $9.8 million – which includes $800,000 in back pay and interest to 67 eligible litigation class members, and a minimum of $9 million in pay equity adjustments for female and minority employees across the JP Morgan Chase U.S. workforce over the next five years. The employer will also take other corrective actions to ensure that its compensation practices meet legal requirements, and conduct annual assessments to ensure pay equity for female and minority employees.
“This settlement is a strong resolution to this matter, providing corporate-wide prospective relief to not only the litigation class members, but also to employees at every level throughout the company,” said Office of Federal Contract Compliance Programs Director Craig E. Leen in Washington, D.C.
“Federal contractors must ensure their pay practices do not violate anti-discrimination laws,” said Regional Solicitor of Labor Jeffrey S. Rogoff in New York. “When they fail to do so, the U.S. Department of Labor will continue to pursue appropriate legal remedies so that companies with federal contracts provide equal pay, employment opportunities and practices for their employees.”
“The Office of Federal Contract Compliance Programs acknowledges JP Morgan Chase’s cooperation to resolve these pay issues and to comply with the nondiscrimination provisions of Executive Order 11246 and work proactively to ensure ongoing compliance,” said Office of Federal Contract Compliance Programs Northeast Regional Director Diana Sen in New York.
In November 2018, OFCCP issued a directive establishing Early Resolution Procedures, launching an initiative to promote early and efficient resolution of supply and service compliance evaluations.
These procedures allow OFCCP and contractors with multiple establishments to implement corporate-wide compliance cooperatively with OFCCP’s regulatory requirements, and resolve identified issues efficiently. In turn, contractors are exempt from future OFCCP evaluations for five years.
In addition to Executive Order 11246, OFCCP enforces Section 503 of the Rehabilitation Act of 1973 and the Vietnam Era Veterans’ Readjustment Assistance Act of 1974. These laws, as amended, make it illegal for contractors and subcontractors doing business with the federal government to discriminate in employment because of race, color, religion, sex, sexual orientation, gender identity, national origin, disability or status as a protected veteran.
In addition, contractors and subcontractors are prohibited from discriminating against applicants or employees because they have inquired about, discussed or disclosed their compensation or the compensation of others, subject to certain limitations, and may not retaliate against applicants or employees for engaging in protected activities. These laws also require that federal contractors provide equal employment opportunity through affirmative action. For more information, please call OFCCP’s toll-free helpline at 800-397-6251 or visit https://www.dol.gov/ofccp/.
Counsel for Civil Rights Sudwiti Chanda, attorneys Alex M. Kondo and Molly J. Theobald of the regional Office of the Solicitor in New York, and Anna Laura Bennett of the Department’s Civil Rights and Labor Management Division in Washington, DC, represented OFCCP in the litigation.