Jan 18, 2019 5:34 PM

Oracle Paid Women $13,000 Less Than Men, Analysis Finds

An economist studying pay records as part of an ongoing lawsuit found the software company paid women 14 percent less annually than men doing similar jobs.

Four tall glass cylinder buildings the headquarters for the company Oracle.

Oracle allegedly paid some female employees more than $13,000 less per year, on average, than male employees in similar roles, according an analysis of Oracle’s own pay data revealed Friday as part of a gender bias lawsuit against the company. The analysis was performed by economist David Neumark, a professor at UC Irvine, who claims the likelihood of such a disparity occurring by chance is less than one in 1 billion.

Neumark’s analysis was submitted in support of a motion to pursue the case against Oracle, filed in 2017, as a class action on behalf of 4,200 female employees who worked in the company’s product development, information technology, and support functions since 2013. The analysis shows that women are paid less even after controlling for career level, performance review scores, office location, tenure at Oracle, and overall work experience, in violation of California’s Equal Pay Act. The analysis excluded employees hired directly after college. Oracle did not immediately respond to a request for comment.

Most of the difference in earnings between men and women stemmed from bonuses and stock grants, rather than base pay, according to the analysis. Women’s base pay was 3.8 percent less than comparable men, it found. But women’s bonuses, on average, were 13.2 percent less than those for men in the same job codes; for stock grants, the disparity was 33.1 percent.

The disparity in base pay arose largely from Oracle’s practice until October 2017 of relying on an employee’s prior pay when setting initial salaries, according to Neumark’s analysis. For lateral hires, the company required recruiters to ask about a worker’s current pay level. All six of the named plaintiffs in the case have left Oracle. Three of them joined Oracle when the company acquired PeopleSoft in 2004.

Oracle stopped the practice of looking at prior pay in October 2017, when then-Governor Jerry Brown signed a law prohibiting employers from asking applicants about their salary histories. However, the plaintiffs argue that Oracle should have known and rectified the disparity earlier because of a previous change to state law, which took effect January 1, 2017, prohibiting employers from justifying unlawful pay differences based on an applicant’s prior salary alone to avoid perpetuating discrimination.

Oracle’s median pay is significantly lower than other software companies such as Google, Microsoft, and Salesforce, according to filings with the Securities and Exchange Commission.

The gender bias allegations in the ongoing lawsuit are not unique to Oracle. James Finberg, an attorney with Altshuler Berzon representing the female Oracle employees, is also representing female Google employees in a suit alleging systemic bias in pay and promotion. Unequal pay is one facet of widespread institutional discrimination in Silicon Valley against women, who also face sexual harassment, less access to venture capital funding, and lack of representation in the industry’s upper echelons.

Finberg says he became interested in potential bias at Oracle after the Department of Labor filed a lawsuit against Oracle, a government contractor, in January 2017—alleging systemic pay discrimination against female, African American, and Asian employees, as well as systemic hiring discrimination against non-Asian applicants in product development and other technical roles. Earlier this month, a judge denied an Oracle request to dismiss that suit.

Oracle tried to block the release of federally mandated diversity reports (submitted annually to the Equal Employment Opportunity Commission) for more than a year, arguing that the information was a trade secret, according to report earlier this month by Reveal, which found that fewer than 13 percent of Oracle’s executives were women in 2015.

“If I were them, I would keep it quiet, too,” adds Finberg.