How to Freeze Your Salary: Get Pregnant

(Bloomberg Businessweek) -- Nilab Tolton had been working as an associate at the international litigation firm Jones Day for five years when she learned she was pregnant. Looking back, Tolton says she knew but also didn’t know—at least not in a conscious, articulable kind of way—that having a kid was going to complicate her goal to make partner. Women make up half of Jones Day’s junior associates but only a quarter of its partners. (Jones Day has represented Bloomberg in a number of employment-related matters.) The century-old firm boasts a client list—Toyota, Starbucks, General Electric—that looks like the S&P 500 and demands the kind of round-the-clock attention from employees that only single people or those with a stay-at-home spouse can easily give. But Tolton had landed at Jones Day straight out of Harvard Law School for a reason. She wasn’t afraid of long hours. She was willing to do the work..“In my eternal optimism, I took the lack of female partners as an opportunity rather than a signal that I’d meet the same fate,” Tolton says. She spent her pregnancy pulling all-nighters and working through the weekend to preemptively make up for the 5½ months of maternity leave that some of the male partners jokingly referred to as her impending “vacation.” For a while, her efforts seemed to pay off. “Holy cow! ... You’re not supposed to be that smart at 9.5 months pregnant!” one partner wrote in an email after Tolton, who’d started her maternity leave, sent him her latest work..She was still on maternity leave in June 2016 when Jones Day notified her it was freezing her salary. She was shocked. “The only time I’d heard of someone getting their salary frozen was after a male associate called female associates c--ts at a work event. There was an HR investigation. He almost got fired. Instead, they froze his salary,” she says. Tolton couldn’t figure out what she’d done to deserve this kind of punishment. She printed out copies of all the “great job!” and “excellent work!” emails she’d received over the past year and pressed her superiors to point to specific criticisms in her annual review to explain their decision. They told her to drop it—the freeze was a done deal. After her second pregnancy and maternity leave a year later, Tolton says, her salary was frozen a second time and she was told to look for a new job..In April she and five other former employees filed a lawsuit against Jones Day alleging gender and pregnancy discrimination. Their complaint is rife with scandalous anecdotes: a male partner who told female summer associates that he wouldn’t offer them positions at the firm unless they danced and sang to a Care Bears song at a firm event; a “Lawyerly Ladies Lunch” that Jones Day advertised with a 4-foot-tall cardboard cutout of a lipstick tube. One plaintiff, who remains anonymous, says that when she asked about a dearth of female partners at the firm, a male partner said it was because “women have babies and stay at home.” The most troubling accusations come from Tolton and a second plaintiff, both of whom got pregnant, went on leave, and were told to leave the firm. Jones Day declined a request for comment, but a public response on the firm’s website provides several statistics that it says “belie the recent claims of six former associates.” (There are 240 female partners at Jones Day; 42% of associates promoted to partner in January 2018 were women.) The firm plans to litigate the case in court..Jones Day is just one of several companies facing pregnancy discrimination lawsuits. In the past few years, tens of thousands of women have come forward with complaints against companies such as Whole Foods Market, Walmart, 21st Century Fox, and, more recently, Netflix, where a former manager alleges that after she’d told her boss she was pregnant, he removed her from a show she was working on. She says she complained to HR and was fired the next day. (A Netflix spokesman says the company has investigated the matter and found the claims to be meritless.) The Jones Day lawsuit comes after another gender discrimination suit filed last year that focuses on the firm’s “black box” compensation plan, in which employees’ salaries are determined in secrecy. The suit alleges this leads to widespread pay discrepancies between women and men. “These issues are all related,” says Deborah Mancuse, the employment attorney representing Tolton and other Jones Day employees in both cases. “It has to do with the way women are valued. Their pay, their promotions, the stereotype that a pregnant woman—or mothers with kids—are not going to work as hard, it’s all ways in which women are undervalued and undercompensated for their work.”.The reasons women are undervalued are complicated, and the problem defies an easy solution. It’s clear, though, that anti-discrimination laws aren’t enough. The Pregnancy Discrimination Act of 1978 made it illegal to fire an employee—or demote her, refuse to hire her, or treat her differently—just because she’s pregnant. Talk to working mothers, and you’ll quickly discover the difference between what the law says and how often it’s actually followed. The PDA, as it’s known, is more than 40 years old, yet women still talk of bosses who refuse to accommodate medical complications. Big projects that culminate after their due dates get reassigned to someone else. Promotions that seemed within reach are suddenly not a good idea right now. “At my old job, my boss pointed to me, in a room full of people, and said I wasn’t a candidate for an open position ‘because you’re not done having babies yet,’ ” says Murphey Sears, an executive at a Dallas nonprofit who was pregnant with her second child at the time, in 2014. Women who make a living from freelance or contract work worry they’ll no longer attract clients. “I can’t walk into a meeting for a six-month contract and be six months pregnant. I don’t think anyone would hire me,” says Molly Magnifico, a marketing consultant in Seattle. Magnifico is currently pregnant; to keep working, she’s teamed up with other consultants on projects that extend past her due date..Even cases that appear to be cut and dried can turn out to be legally complicated. In 2015 a Minnesota orthodontist’s assistant, Nikki LaPoint, had a job offer rescinded after she told the orthodontist she was pregnant. In court, LaPoint produced voicemails in which the doctor asked why she didn’t mention her pregnancy during her job interview, which she didn’t legally have to do. “And when we went into discovery we also found that [the doctor] wrote, ‘Pregnant?’ with a question mark, on the application,” adds Steve Smith, LaPoint’s lawyer. “Rarely do you get that kind of direct evidence of discrimination.” But the Minnesota Supreme Court didn’t see it that way. It determined that LaPoint lost her job offer not because of her pregnancy, but because of her request for 12 weeks of unpaid maternity leave, to which she wasn’t legally entitled..The cumulative effect of sidelining pregnant employees damps their economic power. You see it in women’s average earnings relative to men. In the U.S., women and men with the same educational background and level of experience start their careers earning about the same salary. But by the time they hit their 30s, women’s earnings have fallen behind. “It’s particularly bad among married men and women, which indicates that something is going on beyond just women’s slower promotions in general,” says Sari Kerr, an economist at Wellesley College. “If you narrow down more finely, you find women with young children really start lagging down in earnings.” Several recent studies published by the National Bureau of Economic Research estimate that when women have kids their lifetime earnings drop 14% to 33%..Few of the recently passed abortion restrictions in the South and Midwest came with maternity leave provisions. Alabama has all but banned abortion but guarantees women no paid or unpaid leave. Instead, the state relies on the Family and Medical Leave Act, a federal law that grants employees 12 weeks of unpaid leave but applies only to full-time workers who’ve been employed at a large company for more than a year. Women in Alabama on average make about 24% less than men..Men don’t face this financial penalty. Instead, they benefit when they have kids. “We actually see a salary bump,” Kerr says. But there’s a flip side to this fatherhood bonus. When men become fathers, they’re expected to keep working as long or as hard as before. Fewer than 20% of men in the U.S. get any kind of paternal leave after they have kids. By forcing new fathers to keep working, companies are effectively leaving women to navigate the earliest days of parenthood on their own. Even the most egalitarian couples find themselves falling back on traditional gender roles that are hard to break after a mother returns to work. JPMorgan Chase & Co. recently settled a lawsuit by a male employee who was denied the company’s 16 weeks of paid parental leave because, the bank said, his wife was the “primary caregiver,” not him. JPMorgan’s policy, like those of many companies, is gender-neutral on paper yet still assumes that families have a “primary” parent who’s going to be doing most of the work. According to the Bureau of Labor Statistics, 89% of married women still do the majority of the housework, cooking, and child care regardless of what kind of job they hold. Juggling all that means women can’t put in the kind of 80-hour workweeks a place like Jones Day expects, so fewer of them make partner. Of course, there’s a difference between acknowledging a problem and actively making it worse..Giving men the option to take parental leave would be a step in the right direction but a small one. In 1974, Sweden became the first country to replace its national maternity leave program with a gender-neutral one that offered new parents six months to divide as they saw fit. Men didn’t take leave; 90% of them let the mother take all six months. So in 1995, Sweden began experimenting with rules that required men to take time off after the birth of a child. Things still aren’t equal, but as of 2014 most Swedish fathers were taking at least some leave, and a quarter were taking the entirety of their allotted three months..Of course, Sweden’s six months of parental leave can’t do much about the other 17½ years it takes to raise a child. Even with government-funded child care, 1 in every 3 women in Sweden drops to part-time work after her first child and stays at that level for about 10 years. As a result, the country still has a pay gap: Women there make 88% of what men do, compared with 80% in the U.S..Tolton has left Jones Day, but she’s still a full-time lawyer. She’s now practicing commercial litigation at a boutique firm—one she says is supportive of both her life as a working mother and her decision to file a discrimination lawsuit. When she left Jones Day, she says, other female associates approached her to ask why. Had she just burned out? Gotten a less demanding job? They too had run the numbers on the looming career-vs.-family equation and realized there just weren’t enough hours in the day for them to do both. “I was honest about what happened,” Tolton says. “I said my salary was frozen after my maternity leave, and they told me to find another job.” She says that when her bosses found out what she said, they called her at home and told her to never come into the office again. They would clean out her desk and send any personal items. “It was, I just …” Tolton can’t quite find the words. “I mean, my diplomas were still on the walls.”.To contact the editor responsible for this story: Howard Chua-Eoan at hchuaeoan@bloomberg.net, Caroline Alexander.©2019 Bloomberg L.P.

How to Freeze Your Salary: Get Pregnant

She was still on maternity leave in June 2016 when Jones Day notified her it was freezing her salary.

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