Microsoft's Worker-Friendly Image Faces Court Challenge by Women

(Bloomberg) -- Microsoft Corp. counts itself as a leader with policies promoting gender equality and balancing work and life.

But whatever progress the tech giant has made with equal-pay and family-friendly initiatives, it’s still fighting a lawsuit by women engineers and information technology specialists who claim they were treated for years like second-class citizens.

The women allege the company paid them less than men, stalled career advancement and froze them out following maternity leave. While Microsoft has denied any discrimination, the women assert that the effects of systemic practices are continuing.

A federal judge in Seattle will hear arguments Monday on whether the women can band together as a group of more than 8,630 high-level technical specialists to pursue their bias suit. Class-action status is considered crucial to the success of the lawsuit, allowing the women to pool resources and giving them leverage to force a settlement.

Microsoft has made “significant progress’’ in recent years in ensuring a diverse and inclusive workplace, the company said in an emailed statement. “But even as we work on these broader issues, it is clear we don’t discriminate on pay and promotions.’’

But the women claim that as job levels -- and pay -- increase, the number of women in those positions declines. They blame Microsoft’s policies for those discrepancies.

Weighing heavily over the class action argument will be the 2011 decision by the U.S. Supreme Court in a gender-bias case against Walmart Inc. The high court said the plaintiffs failed to show their experiences were similar enough or that the company had a corporate policy that led to gender discrimination at thousands of Walmart and Sam’s Club stores nationally.

Like nearly all defendants facing class action certification, Microsoft cites the Walmart decision as a reason to deny it.

“Plaintiffs’ claims are simply not the stuff of which class actions are made,’’ Microsoft lawyers said in court papers, criticizing what it called the “extraordinary breadth’’ of the proposed class. The plaintiffs can’t show intentional discrimination or any company policy that could meet the commonality requirements of a class action, Microsoft lawyers argued.

Engineers, IT

Lawyers for the women counter that their lawsuit isn’t like the broadly defined nationwide class that sued Walmart, which included more than 1.5 million women. The Microsoft class covers only two types of employees, engineers and information technology specialists, over a limited number of responsibility levels.

The company uses a “uniform calibration process” to determine pay, performance and promotion prospects “that disadvantages women to a statistically significant degree and that a core group of senior managers oversee and approve,’’ the women said in court filings. For years, the company used a ranking process that “systematically undervalued’’ women, they claim.

Their lawyers cite recent decisions involving Goldman Sachs and Merrill Lynch, which have allowed narrower, more focused classes to be certified.

U.S. District Judge James L. Robart isn’t expected to rule at the hearing.

Microsoft Intern’s Claims Highlight Struggle to Combat Sex Bias

The lawsuit was initially filed in September 2015 alleging that Microsoft discriminated against women engineers and technicians in pay and promotions. The proposed class would include women in those high-level positions from Sept. 16, 2012, to the present.

A plaintiffs’ expert estimated the pay gap between men and women for those technical and engineering jobs as, conservatively, $100 million, to a more expansive $238 million through May 2016. It will rise to include pay gaps to the present, if a class is a certified. The plaintiffs also seek damages for lost compensation caused by lack of promotions.

“The culture at Microsoft is hostile towards women,’’ lead plaintiff Katherine Moussouris said in a court filing. Moussouris, who began working at Microsoft in 2007, said she left in 2014, after repeatedly being passed over for promotion.

“Women were frequently interrupted or talked over at meetings,’’ she said. “Women who shared their ideas were ignored’’ while men who later brought up the same or similar ideas were “acknowledged and congratulated,’’ she said. She said she complained about a senior manager who was sexually harassing women. That manager wound up being promoted and subsequently retaliated against her by limiting her bonus, she alleged.

Another former employee, Amy Alberts, said she was continually paid less than comparable male employees, denied promotions, and then, after she returned from maternity leave, was no longer allowed to manage a team. Named plaintiff Dana Piermarini complained her career stagnated at Microsoft, despite positive reviews, and that she was denied a promotion after returning from maternity leave.

The company denies having any policies that would lead to lower pay or prospects for women and insists that it promotes fair treatment.

“Hearsay anecdotes,’’ from individuals don’t qualify as proof of a policy of discrimination, Microsoft said in court filings.

The company has allocated more than $55 million per year to “innovative’’ diversity and inclusion programs and “created a robust internal investigation process to address employee concerns,’’ Microsoft said in court papers.

The three named plaintiffs, Moussouris, Holly Muenchow and Piermarini, weren’t discriminated against and succeeded at Microsoft, the company argued in a motion to dismiss their claims. All three were given promotions, positive reviews and increased compensation, Microsoft said. Missouris became the highest paid employee in her group, the company said.

The case is Moussouris v. Microsoft Corp., 15-cv-01483, U.S. District Court, Western District of Washington (Seattle).

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