Assessing the Progress of Women in Corporate America: The More Things Change, the More They Stay the Same

• DOI: http://doi.org/10.1111/ablj.12132
• Date: 01 December 2018
• Published date: 01 December 2018

American Business Law Journal

Volume 55, Issue 4, 721–762, Winter 2018

Assessing the Progress of Women in

Corporate America: The More Things

Change, the More They Stay the Same

Terry M. Dworkin,*Cindy A. Schipani,**

Frances J. Milliken,*** and Madeline K. Kneeland***

Overt gender discrimination in the workplace is now less frequent since the pas-

sage of the Civil Rights Act; however, subconscious workplace gender biases per-

sist. These subtle biases continue to contribute to gender inequality in the

employment context, hindering women’s ability to reach the top ranks of corporate

leadership and their ability to achieve pay equity. To combat this inequity, in this

article, we advance several suggestions. First, we urge states to pass legislation

requiring paycheck fairness and urge firms to institute policies of salary transpar-

ency. Next, when there is a lack of women in the highest corporate ranks of the

company, a presumption of discrimination should replace the current legal frame-

work in the courts for disparate treatment analysis in Title VII cases of gender dis-

crimination. We further suggest that firms would do well to improve mentoring

and networking programs for women to help even the playing field and call on

companies to offer implicit bias training for men. Finally, we urge firms to

improve the environment for women in the workplace by adopting and sincerely

promoting family-friendly policies. Not only would these recommendations be just,

they would also likely increase productivity in the corporate world and help resolve

the paradox surrounding the paucity of women in top leadership positions.

*Wentworth Professor of Business Law, emerita, Indiana University and Scholar in Resi-

dence, Seattle University School of Law

**Merwin H. Waterman Collegiate Professor of Business Administration and Professor of

Business Law, Stephen M. Ross School of Business, University of Michigan

***Arthur E. Imperatore Professor of Entrepreneurial Studies and Professor of Manage-

ment, Stern School of Business, New York University

****Doctoral candidate, Stern School of Business, New York University

The authors wish to gratefully acknowledge the helpful research assistance of Mateusz Bor-

owiecki, B.A. and Charlene Franke, B.B.A. candidate, University of Michigan.

©2018 The Authors

American Business Law Journal ©2018 Academy of Legal Studies in Business

721

INTRODUCTION

Equal Pay Day occurred on April 10, 2018. This is the day on the calen-

dar when the average woman has made up for salary losses due to

gender-based pay differences.

1

Put another way, women needed to work

slightly more than three extra months to reach parity with men’s sala-

ries.

2

For every dollar men earn, women, on average, earn $0.80.

3

The

pay gap is just one example of stubborn, gender-based disparities that

persist in the workplace despite the antidiscrimination measures of Title

VII of the Civil Rights Act of 1964 (the Act) and the Equal Pay Act (EPA),

which have been on the books for more than fifty years.

4

Although Title VII, accompanying legislation, and judicial rulings have

improved the work environment for women, pathways for women to C-

level suites are still elusive. Some numbers have improved, but they are

still fairly dismal.

5

For example, women were presidents or chief operat-

ing officers of only thirteen S&P Fortune 500 companies in 2016 com-

pared to nine in 2006.

6

This reality presents a paradox in light of the

findings of several studies that suggest there is a positive correlation

between gender diversity at the top of the organization and financial suc-

cess. Marcus Noland, a coauthor of research conducted by the Peterson

Institute for International Economics, stated,

1

Equal Pay Days 2018,EQUAL PAY DAY, http://www.equalpaytoday.org/equalpaydays/ (last vis-

ited June 1, 2018).

2

Women in Iceland took a different approach to demonstrate the pay disparity. They left

work at 2:38 PM—the time they calculated that they stopped being paid for equal work. Liz

Alderman, Equal Pay for Men and Women? Iceland Wants Employers to Prove It, N.Y. TIMES

(Mar. 28, 2017), https://www.nytimes.com/2017/03/28/business/economy/iceland-women-

equal-pay.html.

3

Equal Pay Days 2018, supra note 1.

4

Civil Rights Act of 1964, Pub. L. No. 88-352, 78 Stat. 241 (1964) (codified as amended in

scattered sections of 2 U.S.C., 28 U.S.C., and 42 U.S.C.); Equal Pay Act of 1963, Pub.

L. No. 88-38, 77 Stat. 56 (1963) (codified as amended in 29 U.S.C. § 206(d)).

5

Joann S. Lubin, More Women Are Winning CEO Jobs,WALL ST. J., Jan. 18, 2017, at B5.

6

Id. Most of these women have advanced after establishing a long, positive record within

the company. “Companies are more willing to take a risk on a man than a woman with a

similar experience set.” Id. (quoting Amy Hayes, a senior consultant at Russell Reynolds

Associates, Inc.). The new CEOs of Hershey Co., Tupperware Brands Corp., Occidental

Petroleum Corp., and NASDAQ Inc., are recent examples. Id.

722 Vol. 55 / American Business Law Journal

With respect to women on the board, evidence is mixed. But the data on

women at C-suite level is much more robust and solid—we can torture that

data any way you want and still get the same answer. For the sample as a

whole, firms with more women can expect a 6 percentage point increase in

net profit.

7

A better path to diversity in the C-Suite could not only help the firm’s

financial performance; it can also help employee retention and begin to

address the persistent gender-based disparity in pay. We suggest several

measures from legal reform to improved mentoring that may help

improve the representation of women in the top levels of management

and reduce the elusive pay gap.

To address these issues, this article is organized as follows. Part I provides

an overview of Title VII. Part II follows with a discussion of the statistics that

indicate how women still face barriers to positions of corporate leadership,

how the elusive pay gap still persists, and how businesses that employ gen-

der diversity in positions of top executive leadership tend to show increased

profitability. In Part III, we analyze the role voice plays in the workplace and

the differences between genders. Part IV details a variety of strategic

approaches that include a rebuttable presumption of discrimination in cer-

tain situations, transparency in wage information, and the role that mentor-

ing could play to address these issues. Concluding remarks then follow.

I. TITLE VII OVERVIEW

Passed in the wake of the civil rights movement, the Act became law

more than fifty years ago. Title VII

8

of the Act makes it unlawful for an

employer to engage in employment practices that discriminate against an

individual with respect to “compensation, terms, conditions, or privileges

of employment;” or “to limit, segregate, or classify … employees … in

any way which would deprive or tend to deprive any individual of

employment opportunities … because of such individual’s race, color,

religion, sex, or national origin.”

9

Consistent with the remedial nature of

the Act, the law’s prohibition of discrimination based on sex is expansive.

7

Tim Smedley, Diversity at the Top Pays Dividends,FIN.TIMES (Mar. 7, 2016), https://www.ft.

com/content/82a3aee2-d97d-11e5-a72f-1e7744c66818.

8

42 U.S.C. §§ 2000e–2000e-17 (2016).

9

42 U.S.C. § 2000e-2(a) (2016).

2018 / Women in Corporate America 723