The decision handed down last week from Administrative Law Judge (ALJ) Colleen A. Geraghty in OFCCP v. Analogic Corporation contains some important information for federal contractors. The case involved an allegation by OFCCP that Analogic paid female assemblers less than male assemblers in two specific positions. Judge Geraghty evaluated the regression approaches and models of each expert and the anecdotal evidence provided by each party, and considered both disparate impact and disparate treatment allegations. There are many interesting nuances to this ruling, and we plan to follow up this blog with other more extensive treatment of various issues. For now, below are a few of the highlights of the ruling.
- Agreed with Analogic that allegations not raised in the Notice of Violation, Show Cause Notice, or Amended Show Cause Notice cannot now be raised in the current lawsuit.
- Reinforced the requirement that, in a disparate impact analysis “in which a defendant uses more than one criterion, the plaintiff must identify the practice that causes the significant disparity.” In the case at hand, OFCCP failed to identify and separate the specific components of Analogic’s compensation system that caused the alleged disparity in salary.
- Reinforced that the regression analyses conducted by experts must contain the variables used by the company to make pay decisions. Judge Geraghty opined that OFCCP’s regression model contained some irrelevant variables and excluded an important variable used in the Analogic merit increase matrix: the quartile in which the employee falls in the pay range. When more appropriate variables were included and controlled for in the regression conducted by the defendant’s expert, the pay difference between men and women was not statistically significant.
- Ruled that the multiple regression analyses used in most proactive analyses and OFCCP audits are more appropriate than a pooled “Oaxaca Model” used by the plaintiff’s expert. Multiple regression analyses focus on differences in actual salary, whereas the Oaxaca Model focuses on differences in predicted salaries. Judge Geraghty considered multiple regression analyses to be stronger because they are “frequently seen in discrimination cases” and the OFCCP’s own guidelines “explicitly…..inform(ed) contractors OFCCP was adopting a multiple regression statistical technique……”
- Found OFCCP’s evidence of disparate treatment against female assemblers lacking because: (a) there was no evidence of “gross statistical disparity” and (b) the anecdotal evidence of intentional discrimination against females was unpersuasive. First, a pooled standard deviation of 2.84 was not considered a “gross statistical disparity”. Second, despite anecdotal claims of “chauvinistic” male managers and subjectivity in performance ratings, Analogic presented evidence that similarly situated male and female assemblers who were hired close in time and received the same performance rating received the same treatment in pay.
By Mike Aamodt, Ph.D., Principal Consultant, Barbara Nett, M.A., Associate Principal Consultant, and Alexander Hsu, M.A., HR Analyst, at DCI Consulting Group