Qualcomm Inc. has agreed to pay $19.5 million to settle a gender-discrimination lawsuit that alleged women engineers faced systemic roadblocks to equal pay and promotions at the company.
The settlement covers 3,300 women nationwide who worked in science, technology, engineering and math jobs at the San Diego-based company over a roughly four-year period.
The smartphone chip designer denied wrongdoing but agreed to change policies to help prevent pay and promotion shortfalls for female employees. It also agreed to hire independent consultants that specialize in organizational psychology to examine gender disparities and provide recommendations to make Qualcomm a more equitable workplace for women.
"Qualcomm is committed to treating its employees fairly and equitably," the company said in a statement Tuesday. "While we have strong defenses to the claims, we elected to focus on continuing to make meaningful enhancements to our internal programs and processes that drive equity and a diverse and inclusive workforce."
Qualcomm's move to settle before the lawsuit was even officially filed in court will probably encourage changes at other firms, said Wendy Patrick, a lawyer and ethics lecturer at San Diego State University.
"You can bet there are other high-tech companies that have watched very closely the way Qualcomm has dealt with this," she said. "One of the results of these suits is people who haven't been sued begin to re-examine their gender policies."
The settlement came after months of talks between the company and lawyers at the Sanford Heisler law firm, which represented seven women leading the class action. Legal fees are expected to be about $5.85 million. The deal has yet to be approved by courts.
Felicia Medina, managing partner for Sanford Heisler in San Francisco, said Qualcomm "was always open to hearing our perspective and the perspective of our clients," even though the company didn't think it did anything wrong.
"Qualcomm is not scared of litigation," she added. "They are involved in litigation on many different fronts. But here there was a real commitment on behalf of the company to be a role model for other technology companies to address these issues head on."
Of the seven lead plaintiffs, five were laid off when the company slashed its global workforce by 15% in November. One left in January 2015 over pay and promotion inequities and another remains employed at the company. Six of the seven reside in San Diego County.
The complaint alleged Qualcomm has a male-dominated culture, with women holding less than 15% of what the company defines as senior leadership positions. In its chip-making unit — the largest in terms of employment — women hold less than 10% of director or senior director jobs.
The company uses a performance-rating system for raises, incentive bonuses and stock awards. Without adequate guidelines for mostly male managers, the system resulted in lower pay for women, the complaint said.
Qualcomm also uses a sponsorship system in which supervisors recommend workers for promotions, instead of posting available jobs for everyone to apply. The system helped create a glass ceiling for women, the complaint alleged.
According to the complaint, "unwritten" practices at Qualcomm encouraged employees to be available at all times. In addition, employees who worked late into the night were rewarded over colleagues who arrived early and left at the end of a normal day. Such practices hurt workers — both women and men — who care for school-age children, according to the complaint.
Mary Walshok, dean of UC San Diego Extension, believes there is a link between successful women in a company and the number of women on a firm's board of directors.
In addition, she said, having relatively few senior or middle managers who are women can hurt lower-level female workers "because these are the people who often mentor and promote the younger engineers."
Without female mentors and managers, "it is easy for women to get behind," Walshok said. "They don't learn the nuanced rules of the workplace. They don't learn how to play with the boys. So they increasingly are perceived as not as competent, not as competitive, not as assertive."
Qualcomm has taken steps to encourage women to enter professions in science, technology, engineering and math, fields known collectively as STEM. It has donated $4.2 million to the Women Enhancing Technology (WeTech) program to support opportunities for girls and women in Africa, China, India and the United States. It also hosts the annual Qcamp for Girls in STEM, a two-week summer camp for middle school girls.
And Qualcomm's Women in Science and Engineering is an employee network for women that promotes STEM education through outreach to female students in high schools and colleges.
"This settlement and the programmatic changes should encourage more women to join this field," said Danielle Fuschetti, a member of the Sanford Heisler legal team. "STEM is and will continue to be a critical component in the effort to close the wage gap."
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