JP Morgan Settlement Shines Light on the Importance of Equality in Parental Leaves

By Michael S. Powers - McMahon Berger, P.C.

May 31, 2019

Financial giant JPMorgan has agreed to pay $5 Million to settle a class action lawsuit alleging that its parental leave policy discriminated against its male employees.  While not the first settlement of its kind, this is thought to be the largest settlement to date of a parental leave sex discrimination case.  This settlement shines a timely light on the issue of gender equality in leave policies, as many employers offer more generous parental leave policies in order to attract and retain desirable candidates.   It also comes amongst ongoing changes in societal views regarding the role of men in raising children.  Interestingly, the parental leave policy at issue in this case seems not to be discriminatory as written, but was alleged to have been applied in a way that discriminated against men.

At the time the lawsuit was filed, JPMorgan offered up to sixteen weeks of paid parental leave to care for and bond with a new child.  The problematic catch was that amount of leave was available only to the child’s “primary caregiver.”  When many male employees applied for parental leave, they were told by their human resources department that only women were considered primary caregivers.  The men were offered two weeks paid leave instead.  Throughout the litigation, the bank has maintained that the policy was always intended to be gender neutral.

The lawsuit was brought in part by the American Civil Liberties Union, on behalf of employees affected by the policy.  The class involved is significant as well; lawyers estimate that up to 5,000 men were denied equal leave between 2011 and 2017.  In order to receive their share of the settlement, class members will need to show that they would have taken the longer leave if it had been available to them.  As a part of the settlement, JPMorgan promised to take steps to ensure that from this point forward, its policy will be applied in a gender neutral manner.

The Equal Employment Opportunity Commission has long advocated for equality in parental leave policies.  Last year the EEOC settled a lawsuit against Estée Lauder for $1.1 Million regarding a parental leave policy that was alleged to favor female employees. In addition to a leave policy that granted more time to women, Lauder’s policy also allowed women more schedule flexibility upon returning from leave.  This type of scheduling flexibility is increasingly seen as a significant benefit, and by favoring mothers over fathers in that regard Lauder’s policy was alleged to discriminate beyond leave itself and into the return to employment. In resolving the Lauder case, the EEOC stated “[p]arental leave policies should not reflect presumptions or stereotypes about gender roles.”

Parental leave policies that grant more time to women than men may, on their face, seem favorable to mothers.  However, advocates for both men and women say that this is not the case.  By giving more time to mothers these policies can be argued to reinforce the idea that women’s careers are less important, and that men’s importance in the workplace is greater.  Similarly they are seen to discourage fathers from accepting equal parenting roles in exchange for prioritizing their careers.  Policies giving more parental leave time to women also might be seen to discourage employers from hiring women if they fear they could lose their new employee to a longer leave than they would if they hired a male candidate.

This case highlights how even policies that are intended to be perfectly legal can ultimately lead to charges of discrimination and lawsuits.  State, federal, and local employment laws are constantly evolving.  State and federal agencies frequently target new areas in which to pursue actions to achieve their enforcement goals.  In light of all of this, it’s more important now than ever for employers to regularly review their employee policies to ensure they remain compliant.  Prevention can be far more effective and far less costly than attempting to correct a policy after it has become the subject of agency enforcement or litigation.  Lastly, this case highlights how important it is to ensure that your company has not only drafted and enacted legally-compliant policies, but that they are applied in a way that doesn’t violate any laws.

The St. Louis employment attorneys at McMahon Berger have been representing employers across the country in labor and employment matters, including all aspects of drafting and maintaining effective and legally compliant employment policies, for over sixty years, and are available to discuss these issues and others.  As always, the foregoing is for informational purposes only and does not constitute legal advice regarding any particular situation as every situation must be evaluated on its own facts. The choice of a lawyer is an important decision and should not be based solely on advertisements.