A California judge has allowed a pay-equity class action to move forward against Google Inc., a ruling that lawyers said could serve as a blueprint for suits that challenge the pay gap in the technology industry and beyond.

The San Francisco Superior Court judge's ruling this week allows a class of as many as 5,000 female Google employees who were in 30 different job positions, including engineering, management, sales and education, to move forward.

The court dismissed an earlier version of the class action, filed in 2017, that sought to certify all women who worked at Google during a certain time period. The recent ruling addressed a narrower class in an amended complaint that alleged a companywide policy that considers new hires' previous salaries to determine a starting salary level.

Judge Mary Wiss, San Francisco Superior Court. Credit: Jason Doiy / ALM

“Google also considers each new hire's prior compensation when determining that employees' compensation, as well as in deciding which job level to place that hire,” Judge Mary Wiss wrote in the March 27 ruling. “Because women are historically paid less than men, plaintiffs allege that Google's use of prior compensation to set starting compensation for its employees perpetuates this historic pay disparity between men and women, and results in men receiving higher starting salaries than women for performing substantially similar work.”

The court found these allegations, including that stereotypes against women are wielded to hire them for lower-paying positions, were sufficient to allow the case to move forward. The court also agreed there could be a case for intentional discrimination, given the company's hiring policies.

Attorneys for Google, represented by a team from Paul Hastings, did not immediately respond to a request for comment.

Whether salary history should be used in the hiring process has been central in the debate over equal pay litigation. The U.S. Court of Appeals for the Ninth Circuit recently took up the issue. In that case, the U.S. Equal Employment Opportunity Commission argued that such policies institutionalize and perpetuate the pay gap. Some state and local governments have passed bans on employers asking about salary history.

The case against Google is moving forward amid wider scrutiny of diversity and alleged discrimination in the technology industry. The U.S. Labor Department has a pending pay-disparity investigation of Google, and there are broader questions about whether Silicon Valley companies have created barriers for female employees.

Women in the U.S. make 80 cents on the dollar compared to men in comparable positions. The gap is much larger for women of color: black women are typically paid 63 cents and Latinas are paid just 54 cents for every dollar paid to white men.

Google has disputed claims that the company gives men better pay and more promotion opportunities. In court documents, the company has argued the employees in the pay-equity class are making overreaching assumptions about lower pay.

Management-side attorneys said the ruling this week could have broad reach.

The lawsuit against Google was filed by Altshuler Berzon and Lieff Cabraser Heimann & Bernstein. The complaint incorporated initial findings by the the Labor Department's Office of Federal Contract Compliance Programs of “systemic” compensation disparities across Google's workforce.

James Finberg at Altshuler Berzon in San Francisco said “the case lays out a road map for how to certify a gender pay equity case.” A company-wide policy that uses prior pay to determine salary “can serve as a basis for certifying a class of the person's subject to the policy.”

Seyfarth Shaw, a management-side law firm, called the ruling against Google “a worrying development for employers.”

The firm said in a client advisory on Friday that the decision “could provide a 'blueprint' for how other plaintiffs may attempt to cobble together broad classes that encompass widely disparate job positions, seemingly without regard for the individual job duties or qualifications associated with those positions.”

Seyfarth's alert continued, “If consideration of prior salary in the context of that disparity is sufficient to plead a wide-ranging pay equity class, it is hard to see how this type of claim could not be replicated many times over across the country.”

The ruling from Wiss is posted below:

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