SEATTLE — Dozens of Washington state employers are facing proposed class action lawsuits accusing them of failing to disclose salary information on job postings, in violation of a new state regulation that went into effect in January.
The law requires companies with more than 15 employees to include a wage scale and benefits information on a job posting, a mandate that is meant to close the gender and racial wage gap by helping applicants negotiate pay rates, compare offers and prevent employers from basing an offer on an individual’s salary history.
Timothy Emery, an attorney with the Seattle-based law firm Emery Reddy, has filed 31 lawsuits since June against a range of employers — from Safeway-owner Albertsons to Adidas to IT company Insight Global. Thirty of those lawsuits were filed in the past week.
Ten months since the new legislation went into effect, Emery said his firm has heard from “so many clients” who are still facing pay inequality and have seen employers continue to hide salary information.
“The lawsuits we have filed seek to change these employers’ practices,” he said. “We felt now was the time to take action … and put an end to these illegal practices once and for all.”
The outcome of these lawsuits — likely the first complaints since the new requirements went into effect — could determine how pay transparency unfolds in Washington.
A ruling in favor of the employers could signal that the new disclosure requirements won’t be heavily enforced. A ruling in favor of the job applicants could lead to more compliance down the line.
“Laws are not equal. Businesses look at different laws in very different ways,” said David Tan, a business professor at the University of Washington. “In some cases, it’s a must-do. … And other laws they treat as they’ll deal with it if and when enforcement happens.”
Where the pay transparency law falls, he said, “is the big question mark.”
‘Gray areas’
The updated Equal Pay and Opportunities Act makes Washington one of a handful of states that requires most employers to disclose wage scales or salary ranges in postings. The act is meant to push companies to offer fair compensation while arming applicants with the information needed to help negotiate salary and help employees understand their workplace pay structure.
Elizabeth Umphress, also a business professor at UW, said the requirement will protect against implicit biases that perpetuate pay inequities.
Women and people of color make less money for the same work than men and people who are white, Umphress said. When an employer extends an offer to a potential employee, they are likely to offer less money to a woman than a man, and less to a person of color than to someone who is white, she continued.
“Most of the time, this is just implicitly happening. Our unconscious is unconscious,” Umphress said. “In order to combat this, we need to have clear procedures and laws to make it such that we pay attention to these factors.”
When the new requirements were proposed, the legislation drew criticism from business trade groups who worried it would be cumbersome for some companies or lead to unintended consequences for job seekers.
The salary range included in advertisements should extend from the lowest to highest possible pay for the role, set by the employer before the job posting is published, according to guidance from Washington’s Department of Labor and Industries. Under the new legislation, job postings must also list benefits offered, including health insurance, retirement plans, paid days off, parental leave and stock options.
Of the 31 lawsuits filed as of Wednesday, 17 allege the job postings did not disclose a salary range. The other 14 accuse companies of failing to include wage information as well as a description of the general benefits and other compensation available.
Many of the lawsuits include job applicants who applied for multiple jobs and sued multiple companies. Jacob Atkinson, a King County resident, is named in eight complaints while Nicole Yount is named in six. Destinee Moliga is the plaintiff in four lawsuits, one against Qdoba from June as well as another three in October against Home Depot, Marriott and Ginsing LLC, which operates restaurants and music venues in Seattle.
Washington’s Department of Labor and Industries received 224 complaints about employers failing to comply with the new regulations through the end of September, department spokesperson Jeff Mayor said.
When L&I investigates a complaint, it first tries to resolve it by educating the employer, Mayor said. If the department and the company can’t reach an agreement, L&I may issue a fine and order the employer to pay damages. The department has not yet done so.
Erin Jacobson, the director of legal and HR advice for Archbright, a Seattle-based firm that helps employers comply with regulations in the Pacific Northwest, said L&I’s approach is helpful for companies who are working to follow the new regulation but still have questions about “gray areas.” Ultimately, lawsuits and court rulings are “how we’re going to get more clarity around some of the details,” she said.
Though the particulars of each lawsuit vary, these first cases will help all employers get more answers, she continued.
Luke Campbell, an attorney with Seattle-based law firm Montgomery Purdue, said he suspects most companies aren’t trying to break the law — they’re just not aware of it. He said that particularly comes up for national companies with job postings that may reach Washington employees but aren’t targeting workers in this state.
“The main barrier is knowledge and education about it being present,” Campbell said. “Once you know about it … there’s some burden in complying, but it’s not particularly difficult compared to everything else a business has to do.”
Following the slew of class action lawsuits filed in Washington, Campbell said, “the compliance rate might go up.”
Who qualifies for relief?
The Washington law defines a “posting” as any solicitation meant to recruit applicants for a specific position. The solicitation must also include qualifications for desired applicants, which rules out things like “Help Wanted” signs posted outside a restaurant. The requirement also applies to employees who are offered an internal transfer or promotion.
If a company violates the new requirement, “a job applicant or an employee” is entitled to remedies, according to a state Legislature website. Those remedies could include up to $5,000 in compensation.
That language — “a job applicant or an employee” — is at the center of the dispute between Destinee Moliga and Qdoda.
Moliga, a Pierce County resident, applied in February to work at the Mexican restaurant in Seattle-Tacoma International Airport. About six months later, she sued.
Because Moliga lost time applying for the position and wasn’t able to evaluate the pay, she and other job applicants are protected under the new amendment, Emery, Moliga’s attorney, argued in statements to the court.
Qdoba, on the other hand, says the amendment is aimed only at current employees and applicants who later receive a job offer. Otherwise, the amendment would mean “any person — qualified or not, actually interested in the job or not — could locate an improper job posting and apply simply to collect the statutory penalties,” attorneys for Qdoba wrote in court documents.
That would create a “windfall result that cannot conceivably be what the legislature intended,” the attorneys continued.
Emery wrote in court records that Qdoba’s interpretation would continue “the very harm” the new amendment was designed to prevent.
The Washington Legislature “adjudged that an employers’ refusal to publish rates of pay in job postings preserved pay inequity,” Emery wrote. “This inequity will remain so long as Qdoba and other Washington employers are permitted to continue withholding their applicant’s prospective pay rates.”
Qdoba did not respond to requests for comment. Attorneys for the corporation declined to comment on pending litigation.
Roughly two weeks after the amendment went into effect, the Emery Reddy law firm published a blog under the title: “Did you know that Washington job seekers could get $5,000 thanks to recent updates to Washington salary transparency laws?”
It directed workers who applied for a job after Jan. 1 that did not provide pay information to take a screenshot of the posting, save the job application and any correspondence with the employer, and contact the Emery Reddy legal team.
There is a hearing scheduled later this month in U.S. District Court in Seattle for the case between Moliga and Qdoba. Most companies involved in the other cases — filed this week in King County Superior Court — have not yet responded in court.
