Apple accused in lawsuit of underpaying female workers in California

Apple (AAPL.O) faced a proposed class action on Thursday alleging that the tech giant systematically underpaid more than 12,000 female employees in California compared to their male counterparts in similar roles. The lawsuit, filed in San Francisco state court by two long-term Apple employees, focuses on engineering, marketing, and AppleCare divisions, claiming disparities in pay for female workers.

According to the complaint, Apple sets starting pay for workers based on their previous salaries or “pay expectations,” resulting in lower compensation for women. The lawsuit also alleges that Apple’s performance evaluation system, used to determine raises and bonuses, discriminates against women.

In response, Apple, headquartered in Cupertino, California, stated that it is dedicated to fostering inclusion and achieving pay equity.

“Since 2017, Apple has successfully attained and upheld gender pay equity. Annually, we collaborate with an independent third-party expert to review each team member’s total compensation and make any necessary adjustments to uphold pay equity,” stated the company.

Eve Cervantez, an attorney representing the plaintiffs, argued that Apple’s practices exacerbate and perpetuate existing gender pay disparities. “This creates a lose-lose scenario for female employees at Apple,” Cervantez emphasized in a statement.

The plaintiffs are being represented by the class action law firms Outten & Golden, Cohen Milstein Sellers & Toll, and Altshuler Berzon. These firms have negotiated significant settlements in other gender bias cases, such as a $215 million agreement with Goldman Sachs last year and a $175 million settlement with Sterling Jewelers in 2022. Both companies denied any wrongdoing.

Since 2018, California has banned employers from inquiring about job applicants’ salary history in an effort to eliminate pay disparities based on gender and race.

According to the lawsuit filed on Thursday, Apple uses applicants’ salary expectations to determine their pay, which, the lawsuit contends, perpetuates wage disparities because most applicants typically request higher salaries than their previous earnings.

The plaintiffs further allege that Apple disproportionately designates higher pay to employees labeled as “talented,” with men receiving this recognition more often. The lawsuit accuses Apple of violating California’s Equal Pay Act, which prohibits gender-based pay discrimination, as well as state laws addressing workplace gender bias and unfair business practices.

In addition, one of the plaintiffs, Justina Jong, claims that Apple denied her request to transfer to another team after she reported experiencing sexual harassment from a coworker. The lawsuit seeks unspecified damages and penalties.