Oracle is Facing Two Employment Lawsuits in California

Oracle was recently hit by two separate employment lawsuits both directed at problems concerning the tech giant’s employees. On one front, the U.S. Department of Labor is suing Oracle for allegedly engaging in discriminatory recruiting and hiring practices as well as engaging in unfair pay practices. Additionally, Oracle is being sued in a class action lawsuit by its employees for alleged violations of California labor laws by imposing clawback provisions on earned commissions after employees have been “replanned”.

Understanding the Oracle Employment Lawsuits

U.S. Department of Labor Puts Pressure on Oracle

Oracle was recently slammed with a class action lawsuit by the U.S. Department of Labor after allegations that certain employee demographics were paid more than other employee demographic groups, and that certain ethnicities were favored for technical jobs at the company’s Redwood Shores, California headquarters location. Despite being accused of paying white, male employees more than other demographics, Oracle also stands accused of favoring employees of other demographic groups during recruiting and hiring of product management and technical positions. The end result is that the class is alleging that Oracle discriminated in its hiring practices against non-Asian applicants. Oracle denies all allegations.

The U.S. Department of Labor has thrown its weight into the ring by threatening to cancel any federal contracts held with tech companies that engage in overtly discriminatory hiring and recruiting practices. By filing this lawsuit, the Department of Labor is challenging what is going on in the technology arena. Oracle stands accused of pay discrimination allegations that white males were being paid more than other employees of different demographic groups despite holding the same job title. Female employees, as well as African American employees and Asian employees were also paid less than their white male counterparts.

Investigations conducted by the Department of Labor have revealed that when it comes to the applications of job candidates for product management positions and other technical positions, Oracle hiring has created an applicant pool that is 75 percent Asian applicants. Of these types of positions that were filled, eighty two percent have been filled with Asian employees. This data was reported by The Mercury News.

Employees Sue Oracle for $150 Million in Class Action Lawsuit

Oracle employees have also banded together to sue Oracle over alleged violations of the California Labor Code. Oracle is accused of bilking employees out of millions of dollars in commission wages by retroactively changing employee commission contracts and replanning employees who have already earned and been paid commissions, which are then clawed back by the company by withholding new commissions that are earned (i.e., paid commissions were confiscated from employees after the fact). These convoluted mechanisms to avoid paying employees commissions that they have earned has landed Oracle in hot water. In addition to costing employees roughly $150 million in damages, it is also likely a violation of the California Labor Code, according to a recent article.

For instance, under Section 223 of the California Labor Code, employers may not secretly pay a lower wage while purporting to pay a designated wage that is either set by statute or by an employment contract. Section 221 makes it unlawful for an employer to collect or receive from any employee any part of the employee’s wages once they are paid by the employer to the employee. These provisions in the California Labor Code are designed to help protect employees from the unlawful clawback of workers’ wages by employers.

Contact a California Labor and Employment Attorney

California employees have certain rights under the law, and should never be taken advantage of by their employers. If you think you may have a wage dispute or other employment law issue, you should speak with a California employment lawyer at Hennig Ruiz. Contact us today for a free consultation.