> Additionally, the Court outlined the contours of an important defense to a plaintiff’s prima facie case, namely that “policies are not contrary to the disparate-impact requirement unless they are artificial, arbitrary, and unnecessary barriers.” Businesses must be given “leeway to state and explain the valid interest served by their policies,” and should be able “to make the practical business choices and profit-related decisions that sustain a vibrant and dynamic free-enterprise system.”
> Further, the Court cautioned, as it did in Wards Cove and Ricci, that when a defendant offers a legitimate business justification, a plaintiff cannot sustain a disparate-impact claim if it cannot prove “there is ‘an available alternative … practice that has less disparate impact and serves the [entity’s] legitimate needs.’” The Court’s decision appears to create a more lenient standard for defendants than the standard the federal government has proposed, in line with the Court’s holding in Wards Cove.
> In a disparate-impact claim, a plaintiff may establish liability, without proof of intentional discrimination, if an identified business practice has a disproportionate effect on certain groups of individuals and if the practice is not grounded in sound business considerations.
> The Court emphasized the plaintiff’s burden to establish a “robust” causal connection between the challenged practice and the alleged disparities. Further, a defendant’s justification is “not contrary to the disparate-impact requirement, unless … artificial, arbitrary, and unnecessary.”
Paying more for people physical located in Palo Alto can be justified by a “sound business consideration.” The company isn’t discriminating based on location, per se. It is simply bidding in a labor market. It just so happens that those bids need to be higher to recruit workers for a physical office in San Francisco than elsewhere.
With remote work, that “sound business consideration” disappears. You no longer care whether the person is physical located in San Francisco. So why should the company pay more for such workers? Justifying the policy as “necessary” and “not artificial” becomes more complicated than with in-person work.
Where is this assumption that equalizing pay across regions is a race to the top, and not to the bottom, coming from anyways?
You seem to be overlooking why geographic discrimination in salaries exists in the first place. As tzs points out in a sibling comment, it’s because when Google has an office in Mountain View, it doesn’t just care about hiring the Nth-percentile employee. It has to pay enough to hire the Nth-percentile employee who wants to live in Mountain View for that salary. Where the worker is located matters because Google has decided that it’s office should be in Mountain View, and further that it wants to have its teams under one roof. That economic justification doesn’t exist for remote workers.
Extending the principle to remote work removes the comfort of accepted practice. We don’t have preconceived notions of what’s “fair” when it comes to remote work. It also removes the insulation layer of market dynamics. Companies need to pay more for talent physically located in an expensive metro area, just as they need to pay more for rent, etc. But when you remove the rationale of having your workforce all in one place, that also undercuts your rationales for paying different amounts in different locations. By paying more to remote workers who want to live in Connecticut versus Georgia, Facebook is subsidizing the lifestyle choices of some developers. But those lifestyle choices are heavily affected by race. (58% of African Americans live in the south, versus 27% of white Americans. One of the major trends of demographics in the US right now is a reversal of the movement of African Americans from the south to northern cities.) And as a result, that subsidy will have a significant disparate impact based on race. Under Facebook’s policy, you’ll have otherwise similarly situated developers being penalized in racially disparate ways for their individual housing choices.
Moreover, so long as Facebook presumes that developers need o be co-located, Facebook has a legitimate economic reason to locate in San Francisco or Austin. It’s easier to recruit good developers there. Any incidental contribution to disparate impacts on groups that happen not to live in those places yields to the economics. But when you abandon that principle, you’re standing pretty naked. For remote work, what legitimate reason does Facebook have to subsidize certain developers’ consumptive habits? I prefer to live near the water—should Facebook pay me more money as a result?