Days before President Obama left office, the Labor Department sued Oracle for alleged pay discrimination against blacks, Asians, and women. The suit was grounded in the Obama-Tom Perez DOL’s misuse of statistics. I discussed that misuse here.
When a center-right administration inherits lawsuits grounded in leftist dogma, it faces a dilemma. It can simply drop the case, but that would alienate staff and arguably make the agency look bad. It can continue to pursue the case, but it’s improper for the government to pursue meritless cases and foolish for it to pursue weak ones.
Often agencies escape the dilemma by settling cases. Defendants are satisfied because the settlements are favorable and enable them to costly avoid litigation. At the same time, the agency saves face. Staffers usually aren’t thrilled, but neither are they outraged.
The Oracle litigation offered Alex Acosta, the new Secretary of Labor, a perfect opportunity to execute this maneuver. The legal proceedings were halted in October 2017 to allow the two sides to mediate. The table was set for a settlement.
But instead of settling, the Acosta Labor Department has reinstated legal proceedings. Not only that, it has (1) added new claims against Oracle, (2) allegedly used data obtained in discovery as the basis for the new claims, in violation of DOL regulations, and (3) allegedly disclosed to the public confidential information for the purpose of trying its case in the press.
The new claims include allegations that Oracle is “channeling” blacks and women into lower paying jobs and giving hiring preferences to immigrant visa holders whom it can underpay. The DOL also accuses Oracle of discriminating against newly hired females and blacks by using prior salaries to set starting salaries at Oracle. This is a perfectly sensible practice and most courts, accordingly, have found it lawful.
The new allegations are marred by the same flaw as the original ones — reliance on unrefined statistical analysis. As I explained here, the underlying fallacy of the Obama Labor Department’s approach to alleging pay discrimination based on statistics is the aggregation of dissimilar jobs for comparison of pay:
When comparing male and female pay rates, it’s vital to compare the pay of people who are performing the same kinds of work. For example, in the tech industry, a prime target of the Solis-Perez-Acosta DOL, it makes sense to see whether male and female engineers performing highly complex work (e.g., on the cloud or on artificial intelligence) are paid about the same. If they aren’t, the contractor should have to explain why.
But it makes no sense to lump all people holding the title “engineer” together. One would expect engineers performing sophisticated work to be paid significantly more than those performing relatively unsophisticated work, such as tweaking Outlook. Thus, no inference of pay discrimination arises from pay differences within such a broad classification.
The original pay discrimination case against Oracle suffers from this fallacy.
Some of the new claims also substitute broad statistics for refined analysis. For example, as the Wall Street Journal points out, the DOL relies for its hiring discrimination claim on evidence that 82 percent of employees hired by Oracle for technical positions are Asians, whereas Asians were “only” 75 percent of applicants. But without an analysis of comparative qualifications, this evidence is insufficient to prove discrimination.
No one should be shocked that Asians applicants for technical positions at Oracle fare somewhat better than non-Asian applicants. At Harvard, the acceptance rate of Asian applicants, based on objective criteria, would vastly exceed the Asian applicant rate. (Harvard avoids this outcome only by tilting the process against Asians by finding that they fall short on “personal qualities.”) Why should we expect a different outcome for technical positions at Oracle?
The DOL’s suit is problematic in other respects. The Wall Street Journal does a good job of highlighting them.
It also occurs to me that, if the Acosta DOL is right that Oracle unlawfully prefers Asians, might not whites be victimized by this discrimination? Are all of the successful Asian applicants in that delta between 82 percent and 75 percent winning jobs at the expense of other minority group members, and not whites? This seems impossible to believe — especially if Oracle’s intent is, as the DOL asserts, to pay its employees less and if, as the DOL asserts also , Oracle pays whites more than other similarly situated employees.
But the Acosta DOL is not claiming that Oracle discriminates against whites.
The Wall Street Journal concludes its editorial by wondering why Alex Acosta continues the “depredations” of his left-wing predecessors at DOL. “Is he running the bureaucracy or getting run over by it,” the Journal asks.
The answer, I think, is that Acosta is happy to accommodate the leftist bureaucracy in order to maintain his standing with Democrats. Now that Acosta is under fire for giving “the deal of a lifetime” to an uber-rich, extremely well-connected pedophile, he can ill afford claims in the press that he’s soft on “discrimination” by Silicon Valley.
But Acosta’s desire to accommodate Democrats long predates the Jeffrey Epstein scandal. It extends back at least as far as his stint as Assistant Attorney General for the Civil Rights Division during the Bush years.
No wonder the Obama Department of Labor is now in its eleventh year.