Biglaw

Jones Day Hit With Explosive Gender Discrimination Case

The complaint takes aim at all things Jones Day: from the compensation black box, to Trump support, to their "fraternity" culture.

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Jones Day has been hit with a gender discrimination lawsuit, filed by a former hiring partner, alleging the Biglaw firm acts as a “fraternity” and their infamous “black box” compensation system is used to pay women attorneys less than their male counterparts. The plaintiff, Wendy Moore, filed a representative lawsuit today in California Superior Court in San Francisco under the California Private Attorneys General Act (PAGA) alleging violations of the California Equal Pay Act, as amended by the Fair Pay Act of 2015, and for violations of the California Labor Code.

The complaint alleges that male partners at the firm actively assist male associates “climb[] the ranks to partnership” while “[f]emale attorneys are treated as second-class citizens. They are not, nor can they be, full members in the fraternity.” The firm’s black box compensation model — which has gotten a lot of attention from Above the Law — also plays an important role in the complaint.

See, unlike the majority of the Biglaw market which operates in lockstep fashion for associates and via formula for partners, Jones Day believes everyone is a special goddamned snowflake, which means, after their first year, everyone gets individualized compensation. The whole thing is also supposed to be kept a big ole secret, and nobody knows what anyone else makes (at both the associate and partner level). The firm claims this “closed comp” or “black box” system breeds congeniality, but well, we here at Above the Law know the truth — it sows the seeds of frustration. And according to the complaint, it also acts as a cover for a gender pay gap:

Jones Day’s fraternity system extends to its compensation scheme: a “black box” compensation structure that all but ensures that female attorneys are paid less than their male counterparts. For example, when a male sixth-year associate recently joined the Trump administration, his federally mandated disclosures revealed that in 2015 he had been compensated $810,000. This sum approximately equaled Ms. Moore’s compensation as an eighth-year partner (and was well above her starting salary of $740,000 when she joined Jones Day as a sixth-year partner in 2013). For much of its existence, Jones Day has ensured that these disparities continue unabated by forbidding attorneys from discussing their compensation. Jones Day has enforced this policy by retaliating against female attorneys who have sought to address—or even openly discuss—disparities in compensation.

The subjective performance review system at Jones Day facilitates and exacerbates the gender disparity in pay by providing cover for male partners to ensure that male associates receive top compensation. That this performance review system ensures male associates at Jones Day receive the highest compensation was in fact confirmed for Ms. Moore during a conversation with Jones Day’s Northern California Partner-in-Charge David C. Kiernan.

Only in the last few months has the Firm edited its written guidelines to comply with California law. Now, instead of saying outright that associates are forbidden to discuss their pay, the Firm’s guidelines merely say that they are strongly discouraged from doing so. In person, however, and at every opportunity—from performance reviews to conversations about pay— partners reiterate the true message: Pay at Jones Day is and must remain confidential, even between partners.

It gets even more outrageous, as the complaint goes on to allege that when Moore complained about the pay gap under the California Labor Code and the California Equal Pay Act she was promptly fired by the firm — just six days later. When she was terminated the complaint alleges there were severe financial consequences: the firm refused to return $337,500 of capital; withheld more than $200,000 in previously-earned compensation; and most astoundingly, on the very day that Moore was terminated, Jones Day paid $43,000 as part of a regularly scheduled payment for work completed but the firm turned around and revoked and refunded the payment.

Moore’s attorney, David Sanford, who has made a name for himself suing Biglaw firms over gender discrimination, said:

“Jones Day’s message in terminating Wendy could not be clearer,” said David Sanford, “Ms. Moore was punished soon after she summoned the courage to speak out against gender discrimination and demand the same pay that her male peers received.”

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The complaint also alleges that while men at the firm bond over sporting events, women were forced to participate in degrading events that even firm clients complained about:

For example, in 2013 and 2014, Ms. Moore was required to help organize and to participate in an event called “Women’s Spa Day,” in which male partners invited their female clients to a spa. During the event, Ms. Moore and other female partners were expected to disrobe in front of the clients and to serve as “hostesses.” The Firm’s all-male business development committee chose to host this event year after year, over the repeated oral and written objections of Ms. Moore and other female partners. These female partners repeatedly notified the Firm of the event’s degrading nature and relayed direct and unambiguous feedback from female general counsel that the Firm’s clients found the event inappropriate, gender-stereotypical, and offensive.

The complaint further alleges that Jones Day’s…. full throated support of the president also led to issues. Specifically, the complaint says that in her role as hiring partner, Moore dealt with “female law students [that] were unambiguously stating in their interviews with Jones Day that the Firm’s express support for Mr. Trump and its black-box compensation model left female attorneys behind.”  Moore informed the Firm that “women did not want to risk the adverse impact on their careers by joining a Firm that proudly supported Mr. Trump and black-box compensation.” The firm’s response? The complaint alleges Sharyl Reisman, the Firmwide Chair of Recruiting and a member of the Firm’s Diversity & Inclusion Task Force, told Moore to “tone down her criticism, lest she provoke a negative response from Firm management.”

We’ve reached out to Jones Day for comment, and will update the story if they have a statement.

Read the full complaint — it’s worth the time — on the next page.

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headshotKathryn Rubino is a Senior Editor at Above the Law. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).

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