ORCL Oracle Corp

By Lauren Weber 

In the waning hours of the Obama administration, the Labor Department has filed suits against federal contractors Oracle Corp. and J.P. Morgan Chase & Co. alleging that some employees weren't paid fairly.

The 11th-hour actions seek to make good on the president's promise to end wage gaps based on gender and race. The Office of Federal Contract Compliance Programs, which filed the actions, has had a mixed record on pay issues despite receiving millions of additional dollars for an investigative push.

The suits come as Labor Secretary Tom Perez is set to hand the reins over to a successor picked by President-elect Donald Trump. Mr. Trump has nominated Andy Puzder, a fast-food chain chief executive who has to date expressed little interest in fair-pay issues.

On Wednesday, the compliance office filed separate suits with the Labor Department's Office of Administrative Law Judges against Oracle and J.P. Morgan, alleging that the firms had engaged in pay discrimination.

The fates of these lawsuits are uncertain. A new labor secretary could choose to withdraw the recent actions, settle them quickly or pursue them apace. The Labor Department and the Trump transition team declined to comment.

The agency said that since May 2012, J.P. Morgan paid at least 93 women who worked in a technology unit in its investment bank less than men in the same positions. The complaint said the bank's government contracts could be canceled if it doesn't provide relief.

A J.P. Morgan spokeswoman said the bank tried to resolve the Labor Department's concerns and was disappointed that it filed a complaint. The matter has been progressing for a few years, people familiar with the matter said, and J.P. Morgan attempted to rebut the allegations late last year. The spokeswoman also said the bank is committed to "diversity in the workplace," a matter bank CEO James Dimon has been vocal about for years.

In the case of Oracle, the agency alleged the technology company routinely pays its white male workers more than female and minority counterparts in the same positions. The suit puts at risk hundreds of millions of dollars in federal contracts Oracle has won.

The compliance office in 2014 began reviewing Oracle's equal employment opportunity practices at its Redwood City, Calif., headquarters, and this week's suit alleges that the company has a systemic practice of paying white male workers more, leading to discrimination against female, African-American and Asian employees.

It also alleges that Oracle has favored Asian workers in its recruiting and hiring practices for product development and other technical roles, resulting in discrimination against non-Asian applicants.

An Oracle spokeswoman said the complaint is "politically motivated, based on false allegations, and wholly without merit." She added, "Oracle values diversity and inclusion, and is a responsible equal opportunity and affirmative action employer."

Earlier this month, the compliance office sued Alphabet Inc.'s Google, saying the technology firm had refused to comply with requests to turn over compensation data that the agency uses to determine whether contractors are complying with federal laws.

Google said Wednesday that it has provided hundreds of thousands of records to the agency, but it won't release any confidential data. "These requests include thousands of employees' private contact information which we safeguard rigorously," the company said in an email Wednesday.

Under President Barack Obama, the compliance office's budget rose 40% from $81 million in 2008 to $113.6 million in 2016, with pay discrimination named a top enforcement priority.

Priorities at government agencies typically shift when a new administration takes over. President Bill Clinton pushed an antitrust lawsuit against Microsoft Corp. in the 1990s; after George W. Bush took office in 2001, his administration moved quickly to settle it.

As CEO of CKE Restaurants Holdings Inc., parent of the Carl's Jr. and Hardee's chains, Mr. Puzder last year told Business Insider that he favored automating fast-food jobs in part because machines are "always polite, they always upsell, they never take a vacation, they never show up late, there's never a slip-and-fall, or an age, sex, or race discrimination case."

By filing the wage suits before Mr. Obama's term expires, the agency "is essentially locking in some effort and some resources," said Marc Bendick, a workplace-discrimination specialist who has consulted for the compliance office.

Withdrawing the suits, he said, could be embarrassing for the Trump administration if such a move looked like it was driven by political considerations. Last month, Mr. Trump named Oracle co-CEO Safra Catz to the executive committee of his transition team. In September, the compliance office suedPalantir Technologies Inc. for allegedly discriminating systematically against Asian job applicants since at least January 2010. Palantir's co-founder is billionaire investor and Trump adviser Peter Thiel. Palantir denied the allegations at the time and has said it would defend itself.

--Jay Greene and Emily Glazer contributed to this article.

Write to Lauren Weber at lauren.weber@wsj.com

(END) Dow Jones Newswires

January 19, 2017 02:47 ET (07:47 GMT)

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