Xerox class action certified
Law.com has this from the New York Law Journal (Leigh Jones): “Class Status Granted in Bias Suit Against Xerox”:
A federal civil rights lawsuit filed by Xerox sales employees alleging that the company assigned them to unprofitable territories and failed to promote them because they are black has received class action status. . . .
The ruling in Warren v. Xerox Corp., 01 CV 2909, means that all black Xerox sales employees who worked for the company in the United States from Feb. 1, 1997, to the present or to the date of a judgment are included in the class. While the decision allows the plaintiffs to go forward as a class on injunctive and declaratory claims, it requires them to proceed individually in the damages and remediation phase. . . .
The lawsuit . . . claims that Xerox initiated a sales restructuring program in 1997 that . . . systematically assign[ed] black sales employees to inferior sales territories, often in low income or minority neighborhoods.
It also claims the company refused to promote black sales people or transfer them to more lucrative territories regardless of their performance and that the company denied sales commissions to those employees who rightfully earned them. . . .
Apparently persuasive to the judge and the magistrate judge was a report issued by the plaintiffs’ expert that, according to the recommendation, “reveal[ed] a statistically significant disparity between the earnings of black and white salespersons at Xerox.”
Xerox had argued that the report failed to establish a nexus between the territory configurations and the alleged income disparities. But the court was not convinced that Xerox’s cited reason for the disparity, individual performance, could undermine the plaintiffs’ claims that they had common experiences to warrant class action status.
“Indeed, if an assertion of inferior performance were sufficient to defeat a certification motion, few, if any, classes would ever be certified in employment discrimination cases,” Mann wrote in a footnote. . . .
These employment class actions against large companies have become rather popular. Unfortunately, many companies have caved in to huge settlements because of the burdensomeness of defense costs, which just encourages the plaintiff’s bar to keep filing them.
It is certainly possible with salespersons like these that there was a (conscious or unconscious) racial matching of employees to territories, which could have impacted sales and thereby commissions.
Analysis of performance measures for salespersons can be tricky. Sales numbers seem to be very objective measures of ability and effort, so that commissioned earnings disparities are not discriminatory but based on ability and effort. But the assigned territory and its existing and potential customer base can have a huge impact, even to the point that higher earners are actually less hard workers, not more, because the business opportunities they have are so superior.
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