Governor frowns on gender pay disclosure bill

Lawyers lobbying for California’s largest companies won a victory Sunday when Gov. Jerry Brown vetoed a bill that would have made businesses reveal differences in what they pay women and men.

The governor “vetoed a job killer bill that would have imposed a new data collection mandate on California employers and exposed them to public criticism and costly litigation,” Jennifer Barrera, policy analyst for the California Chamber of Commerce, said in a statement.

Employment defense lawyers added that their clients breathed a sigh of relief after the governor’s rejection of Assembly Bill 1209.

“There was a lot of concern that this bill was doing a lot of work for the plaintiffs’ bar,” said Benjamin M. Ebbink, an employers’ attorney with Fisher Phillips LLP. “Plaintiffs’ attorneys could be trolling a website to find data, get in touch with a worker and file a lawsuit.”

Still, the governor’s veto was a rare victory for a business community in a legislative year that has seen workers’ rights expand. Brown signed Assembly Bill 168 last week to bar employers from asking job applicants about their salary history. Previously, Brown signed bills that expanded parental leave and barred employers from asking questions about a worker’s criminal background.

“When it comes to litigation,” Ebbink said, speaking of the statehouse, “it’s almost exclusively defense work for employers.”

Proposed by Lorena Gonzales Fletcher, a Democratic Assembly member from San Diego, AB 1209 would have required employers to disclose and publicly post information on mean and median wage differentials among different occupations.

The legislation applied to businesses with 500 or more employees, and required revelation of pay differentials between salaried workers and also board members, as opposed to hourly employees.

AB 1209 was billed as addressing the wage gap between men and women. Women in California are paid 86 centers for every dollar a man earns, according to federal data.

AB 168 also is meant to address the wage gap, and Brown had a bill signing ceremony for it last week at which he was flanked by female legislators.

Why the governor signed one bill and not the other is part of his “stepped approach,” according to plaintiffs’ employment lawyer Cliff Palefsky, of McGuinn Hillsman & Palefsky.

Unlike the singular requirement of the bill barring salary history conversations, Palefsky added, AB 1209 “talked about means and medians and really a broad statistical compilation that doesn’t drill down enough to be meaningful.”

Brown often warns of the perils of increased litigation, and the bill seemed to him to be burdensome to employers, Palefsky said.

The governor’s veto statement on AB 1209 cited “ambiguous wording” that “could be exploited to encourage more litigation than pay equity.”

The statement also mentioned other equal pay legislation that Brown has signed, including 2015 amendments to the Equal Pay Act.

Mariko Yoshihara, political director for the California Employment Lawyers Association, which advocates for plaintiffs’ lawyers, said that while she was disappointed in the governor’s veto, it was an encouraging legislative session overall for her group’s membership. Tuesday is the last day for Brown to sign or veto legislation until the winter legislative session.

AB 1209 “would have forced employers to take a hard look at how they are paying their workers, and while the governor might not be ready to go so far as to make that pay data public, we hope to create some sort of pay data reporting requirement soon,” Yoshihara said.