A federal judge has dealt a blow to women who have accused Microsoft of systematic discrimination against female employees, refusing to certify their class-action lawsuit against the company. The three named plaintiffs in the lawsuit will be able to proceed with their case. But they won’t be proceeding as representatives of the broader group of women who—according to the lawsuit—have suffered from unequal pay and degrading treatment in the workplace.
In a class certification motion unsealed in March, three Microsoft employees—Katherine Moussouris, Holly Muenchow, and Dana Piermarini—laid out their evidence that Microsoft’s corporate culture is systematically hostile to female employees.
An expert for the women found that after controlling for factors like employees’ age, tenure with the company, and scores on performance reviews, women were paid less than men by a statistically significant amount. In total, the plaintiffs estimated that Microsoft had been underpaying women in the proposed class by between $100 million and $238 million.
On top of that, the women alleged that Microsoft had turned a blind eye to systematic sexual harassment within the company. According to the plaintiffs, technical women at Microsoft lodged 118 or 119 complaints of sexual harassment against Microsoft between 2010 and 2016. The team tasked with investigating these complaints found that only one of them was justified—suggesting, the women argued, that the issue was not being taken seriously by the company.
During the same period, women at Microsoft made 108 complaints of sexual harassment, including groping at company events and inappropriate comments from Microsoft managers. “The flagrant and repeated incidents of sexual misconduct toward women at Microsoft reflects the corporate culture in which women are undervalued and underpaid,” the women argued.
The motion for class status was supported by declarations from a number of other women who work at Microsoft. “I believe that Microsoft discriminated against me during my time in Engineering by denying me a promotion that I should have been granted,” wrote Microsoft engineer Heidi Boeh in a court filing last year.
We did nothing wrong
But in its response, Microsoft said that it is committed to equal treatment for women.
“Microsoft is keenly aware of the gender imbalance in the tech industry and is deeply invested in improving it,” the company wrote early this year. “To that end, Microsoft has allocated more than $55 million per year to innovative diversity and inclusion programs, implemented mandatory company-wide unconscious bias training, and created a robust internal investigation process to address employee concerns.”
The company also argued it would be a mistake to lump together the situations of thousands of different women across the company. Microsoft argued that plaintiffs failed to identify any specific Microsoft policy that produced the allegedly unequal pay between men and women.
“Although Microsoft set non-discriminatory criteria for these otherwise discretionary review processes, Plaintiffs do not identify a common mode of exercising discretion (as required to certify a class); rather, Plaintiffs seek certification for precisely the opposite reason: “lack of standardization,” Microsoft wrote.
Judge James Robart evidently found Microsoft’s arguments persuasive. On Monday, he announced that he was denying the women’s motion for class certification in an entry on the court’s docket. However, Robart’s order explaining his reasoning is temporarily sealed to give parties to the case time to confer about whether portions of the order need to be redacted.
If Robart had certified the case as a class action, it would have strengthened the women’s hands, because the potential cost to Microsoft of losing the case would be in the hundreds of millions of dollars—if not more. That would have given Microsoft a powerful incentive to settle the case—and allowed more women a chance to receive compensation without taking the career risk of suing a current or former employer.
Now Moussouris, Muenchow, and Piermarini will have to fight their case against Microsoft as individuals. Other women who want to raise similar issues will have to hire their own lawyers and file their own lawsuits. Without the prospect of a big class-action payouts, lawyers may be less willing to take the case on favorable financial terms. Meanwhile, Microsoft may be more motivated to fight these individual cases, since a settlement favorable to the women could encourage others to file their own lawsuits.
Microsoft praised the ruling in a statement to Geekwire, saying, “We remain committed to increasing diversity and making sure that Microsoft is a workplace where everyone has an equal opportunity to succeed. The judge made the right decision that this case should not be a class action.”
