Under Alex Acosta, the Obama Labor Department rolls on

In 2016, the Obama Labor Department, under the radical left-wing leadership of Tom Perez, issued two notices of violation against Microsoft. It found that the company paid women in engineering and other unspecified tech jobs less than their male co-workers and that it passed them over for promotions due to gender.

As I discussed at length here, the Obama DOL adopted a radical approach to finding pay discrimination based on the misuse of statistics. The tech industry became the major target of DOL actions based on this untenable approach.

The Trump administration might have been expected to adopt a sounder, less ideologically driven approach to analyzing pay statistics than its predecessor. But, as I have often observed, DOL Secretary Alex Acosta seems determined not to rock the boat, no matter how leftward its course. As a result, the Obama Labor Department is about to complete its tenth year.

Microsoft, though, was at least able to negotiate a settlement with the Labor Department’s Office of Federal Contract Compliance Programs (OFCCP). OFCCP was under the direction of Ondray Harris, a solid conservative.

But Harris later resigned and left the Department. Rumor has it that he was fed up with Acosta’s unwillingness to depart from the policies of Tom Perez, though I don’t know this to be the case.

Now, Acosta has pulled the plug on DOL’s agreement with Microsoft. Acosta reportedly believes OFCCP was letting Microsoft off too easy. DOL also says OFCCP officials didn’t have the authority to finalize the deal without approval from the Labor Solicitor.

As to the latter claim, Harris told Bloomberg that OFCCP has the power to resolve investigations without input from the department’s solicitor if it happens before a lawsuit is filed.

Harris couldn’t comment on the merits of claims against Microsoft because he was at the Department during part of the probe. He did say this, however:

When OFCCP believes it found something, you can’t take that to mean something was actually there. Oftentimes, these things can go on for years and it becomes a battle of experts.

I think this is a discreet way of making the point I made above: The findings against the tech companies, including Microsoft, are based on statistical analyses that infer discrimination that isn’t there, and certainly not to the extent claimed.

Typically, this happens under the Tom Perez/Alex Acosta regime mainly because the DOL’s statistical analyses aggregate dissimilar jobs for comparison of pay. When comparing male and female pay rates, it’s vital to compare the pay of people who are performing the same kinds of work.

For example, in the tech industry, a prime target of the Perez-Acosta DOL, it makes sense to see whether male and female engineers performing highly complex work (e.g., on the cloud or on artificial intelligence) are paid about the same. If they aren’t, the contractor should have to explain why.

But it makes no sense to lump all people holding the title “engineer” together. One would expect engineers performing sophisticated work to be paid significantly more than those performing relatively unsophisticated work, such as tweaking Outlook. Thus, no inference of pay discrimination arises from pay differences within such a broad classification.

Moreover, it is preposterous to aggregate all “exempt” employees and compare their pay. Of course, the CEO of a tech company will be paid more than engineers, and engineers will be paid more than, say, human resource specialists. Inferring discrimination, or even the hint of it, from gender pay disparities within a group this broad is absurd.

How much bogus aggregation did the Perez-Acosta DOL indulge in against Microsoft? I don’t know. But Harris’ comment, coupled with what I know about DOL’s treatment of other tech companies (such as Oracle) tells me it indulged in too much.

Under Acosta, the DOL has adopted additional modes of analyses that give the appearance of pay discrimination where none exists. These include ignoring the labor market and ignoring what jobs employees pursued; what additional skills, qualifications, and experience they obtained; and whether at some point they chose to work part time.

Microsoft says the settlement Acosta reneged on was in line with other recent settlements between the agency and other federal contractors. Some of these settlements give more credit to DOL’s approaches to calculating pay discrimination than they deserve. Thus, if anything, it’s likely that the settlement with Microsoft was too hard on the software giant.

Why did Microsoft consent to it? Probably because, as Harris says, “oftentimes things can go on for years” and it simply wanted to move on.

Unfortunately, under Alex Acosta, the Obama Department of Labor is also going on “for years” during the Trump administration. It’s past time to move on.