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Trial nears on class-action suit accusing Boeing of gender bias

By Shirleen Holt and David Bowermaster
Seattle Times business reporters

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Barring a last-minute settlement, Beck v. Boeing will be the largest gender-discrimination class-action lawsuit to go before a jury.

"We are moving forward in preparation for trial," Ken Mercer, a Boeing spokesman, said Wednesday.

Case at a glance Complaint: Women employees were denied equal pay, overtime and advancement Class size: 28,000 women in the Puget Sound area Covering: 1997 to 2000 Seeking: Unspecified back pay and punitive damages Judge: Marsha Pechman, U.S. District Court Length: Maximum of four weeks Trial starts: Monday Lead lawyers: Michael Helgren of McNaul Ebel Nawrot Helgren & Vance for plaintiffs; Barbara Berish Brown of Paul, Hastings Janofsky & Walker for Boeing

For those reasons, gender-discrimination class-action suits are typically settled out of court.

It's a high-risk strategy. If Boeing loses, it may have to pay hundreds of millions of dollars in punitive damages.

Even if it prevails, Boeing could face morale and public-relations problems stemming from evidence that plaintiffs' lawyers hope to introduce to portray Boeing as a hostile place for women to work.

Boeing is fighting the suit because "we believe these claims simply do not reflect how we do business," Mercer said. "(Boeing) has been and will continue to be committed to promoting diversity in the workplace and equal opportunity for all its employees."

This is not the only discrimination case Boeing will battle next week.

On another floor of the federal courthouse Monday, a race-discrimination class-action suit against Boeing, brought by 1,850 Asian engineers and technical workers, will go to trial before U.S. District Court Judge Robert Lasnik.

From janitor to sales rep

The 12 women who are bringing the first suit as named plaintiffs held jobs that ranged from janitor to corporate sales representative.

They claim that before 2000, women at Boeing earned less than men doing the same job and were denied job training and promotions. They also say women were sexually harassed in some cases.

Timeline 1994: Women from the engineers union complain they're being paid less than men for doing the same job. 1995: Boeing quietly begins boosting wages for some union and nonunion women. Some employees call the raises "Bucks For Babes." 1996: A standard U.S. Labor Department audit uncovers large pay disparities at a Boeing site in Pennsylvania. 1997: Boeing acquires McDonnell Douglas. 1997: The government widens its wage probe to other facilities, including in the Puget Sound area. Investigators find "systemic discrimination" against women and minorities. 1998: CEO Phil Condit and other top executives are briefed on wage biases at a January retreat in Palm Desert, Calif. 1999: Boeing settles the Labor Department case for $4.5 million. Privately, executives are pleased: "We thought there was a lot more potential financial liability out there," a former head of employee relations said. 2000: In February, female workers file a class-action lawsuit against Boeing. "Boeing has a good-old-boy system that is pervasive and longstanding," a production worker claims in the suit. 2000: In March, Boeing commits $22 million more toward fixing the pay disparities. Source: Court documents

The heart of the plaintiffs' case hinges on numbers. Lawyers plan to use Boeing's own salary studies as well as office memos, government audits and paid experts to argue that women were discriminated against in every Puget Sound-area location and at nearly all levels of the organization.

They'll target Boeing's compensation history, seeking to demonstrate that women started at lower salaries than men and continued to earn proportionately less with every percentage-based pay increase. Boeing disputes those claims.

In one analysis, a statistician hired by the plaintiffs figured the odds that the disparities were due to chance were one in 3 trillion.

The lawyers also plan to argue that pay differences were caused by a "good-old-boy" culture at Boeing. They say that culture gave male managers loose rein in deciding who got placed into which pay category, who got overtime and who would be promoted — decisions the women say were often based on gender stereotypes or favoritism.

"There is a cone of silence over (job) information; men are allowed within the cone, women are not," Ellen Schaff, a 22-year veteran who worked in the electrical department, said in court papers.

Patti Anderson, a manufacturing engineer and third-generation Boeing employee, said in a deposition that she did the same work as men in grade 35, but was paid as grade 33 — a $2,000-a-year difference.

"My husband, brother and dad also performed the same job as me and consistently received higher raises than I," she said. "I know this to be true because I saw their pay stubs."

Accounts called 'misleading'

Boeing says such anecdotes prove nothing.

"The picture painted by the misleading snippets (plaintiffs) offer bear no resemblance to The Boeing Company today, or to its three heritage companies, and cannot be squared with the record," according to one Boeing court filing.

Boeing insists it treats all its employees fairly, and contends any pay disparities between genders are due to factors such as previous work experience and performance.

"These differences are the result of quantity or quality of work, seniority and / or merit-based pay systems, or other factors other than gender," the company argues.

Lawyers for the women claim internal Boeing studies provide undisputed evidence that women were paid less than men. But U.S. District Court Judge Marsha Pechman, who is presiding over the case, last month ruled that the validity of statistical studies must be proven in court.

Like the women suing the company, Boeing will rely on outside experts to interpret the numbers and policies in its favor.

Among its witnesses is Dr. Leonard Biermann, national director of the nonprofit National Employment Law Institute and a 30-year employee of the Department of Labor's Office of Federal Contract Compliance.

"Boeing's track record on these issues places it among the upper echelon of all of the many employers' compliance programs I have reviewed in my career," Biermann said in a sworn statement.

Two former Boeing executives are also likely to have starring roles.

Jim Dagnon, retired chief of human resources, will take the stand to defend the company's employment and compensation policies.

Phil Condit, former chairman and chief executive, may also testify.

Both would likely face attacks from plaintiffs' lawyers, who claim the executives in 1998 were aware of data indicating Boeing discriminated against women, but did nothing about it.

1990s investigations

The roots of the case go back to the mid-1990s, when the Society of Professional Engineering Employees in Aerospace complained that some of its female members were being paid less than the men for doing the same job.

Around the same time, a government agency charged with ensuring that federal contractors meet affirmative-action rules started auditing Boeing sites.

Internal and government investigations showed that women often earned less than men for doing the same job. In the company's commercial airplanes group in the Puget Sound area, for example, that translated to an average of $1,742 a year less for women.

Jackie Roberts, who managed diversity programs for that business unit, said in a deposition that Boeing had a "concrete ceiling" that excluded most women from upper management.

A team assigned to study gender disparities at Boeing conceded as much. A May 1998 internal report states: "Few persons, especially women and minorities, are hired into management."

Worried about a major lawsuit, Boeing quietly moved to fix some disparities in the mid- to late 1990s, bumping up women's salaries in a program that some employees derisively called "Bucks for Babes."

Lawyers for the plaintiffs, however, argue that Boeing's efforts didn't eliminate wage gaps and did nothing to fix the causes.

Boeing kept its salary studies secret. The company moved one of its key compensation managers, Paul Wells, into an office that not even janitors could unlock.

Then-CEO Condit and other top executives were briefed on wage disparities at an executive retreat in January 1998, according to memos presented by the plaintiffs. However, in an employee newsletter distributed five months later, Dagnon declared, "at no time has Boeing done a companywide analysis and found that gender or racial bias exists."

In 1999, Boeing ended the Department of Labor audits by agreeing to spend $4.5 million for back pay to some of its female employees. The company said it spent $10 million that year to reduce pay disparities.

Boeing figured its potential liability in the matter could be upward of $80 million, according to the transcript of an executives' meeting that was filed in the case.

That same year, Boeing settled two race-discrimination class-action lawsuits for a combined $15 million. Those cases were brought by African-American employees who said the company discriminated against them in pay and promotions.

The current case, Beck v. Boeing, was filed in February 2000 and was originally a national suit covering female workers at all Boeing sites. A court subsequently ruled that the case should be broken up by state.

Similar suits in Wichita, St. Louis and Southern California have been dismissed. But a suit in Tulsa, Okla., received class-action certification in March and is moving ahead.

Shirleen Holt: 206-464-8316 or sholt@seattletimes.com

David Bowermaster: 206-464-2724 or dbowermaster@seattletimes.com

Copyright © 2004 The Seattle Times Company

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