On Oct. 5, the U.S. Department of Labor (DOL) announced that it had settled with the University for nearly $1.2 million over “allegations of compensation discrimination” involving over one hundred female professors.
In the early resolution conciliation agreement (ERCA) dated Sept. 30, the DOL Office of Federal Contract Compliance Programs (OFCCP) alleged that the University underpaid 106 female full professors compared to their male counterparts from 2012 to 2014. The OFCCP found that the University violated Executive Order 11246, which prohibits federal contractors from discriminating in employment based on race, color, religion, sex, sexual orientation, gender identity, or national origin.
As part of the settlement, the University agreed to pay $925,000 in back pay to the female professors affected, as well as at least $50,000 in future salary adjustments each year for five years, for a minimum of $250,000. The University, however, has denied any wrongdoing.
The announcement comes three days after Yale agreed to pay $87,500 over similar pay discrimination allegations involving four female cardiologists at Yale’s School of Medicine’s Cardiovascular Medicine Section in 2016. Like Princeton, Yale did not admit to any of OFCCP’s allegations.
DOL Deputy Regional Director Joanna Hawkins explained that the University’s settlement, “along with other recent OFCCP settlements with universities, illustrates the importance of universities conducting annual reviews of their employment practices and ensuring that professors and other employees are hired, advanced, and compensated consistently with equal employment opportunity principles.”
Such ERCAs are common in order to avoid lengthy and costly litigation, even if the institution under investigation is “confident of winning the lawsuit,” explained Henry Farber, Professor of Economics at the University.
“In these court cases, it ultimately comes down to a battle of the experts who have scientifically based views on what went on,” he said.
According to University Spokesperson Ben Chang, the case stemmed from an “ordinary compliance review” as part of “periodic reviews of federal contractors” by the OFCCP.
In a statement to The Daily Princetonian, Hawkins confirmed that the review was initiated on Jan. 31, 2014 and remained open until Sept. 30, 2020, when the ERCA was signed. The compliance evaluation examined compensation practices involving all University employees from 2012 to 2014, including “all academic and non-academic staff.”
As a result of the investigation, the OFCCP alleged that the University paid “statistically significant” lower salaries to 106 female full professors than to “similarly-situated male Full Professors.” The OFCCP relied on a compensation model that grouped and assessed all full professors across the University, controlling for six factors, including years in current job, other years at the University, department, full-time status, highest degree earned, and prior experience.
However, the University contended that full professors across the institution are not all “similarly-situated.” In the ERCA, the University claimed that the OFCCP’s compensation model was not department-based and did not take into account “market forces or performance” or how “various factors influencing salary” interact with one another. In the agreement, the University maintained that its own models “did not show any statistically significant pay disparities.”
“Like in any industry, generally the highest salaries go where the highest demand is,” Chang wrote in an email to the ‘Prince.’ “Many factors go into how individual departments determine salary, including market demand based on external forces.”
He declined to comment on specifics.
Farber said that, as part of an institution’s goal to have first-class faculty in every department, “you can’t underpay the faculty in certain departments.”
“Now imagine you said, ‘Okay, fine. Let’s just pay everyone the same and peg it at the top-paying department,’” he continued. “That could be too expensive even for Princeton.”
“So the university — in my own view — correctly benchmarks the paid departments to what the competition is paying,” Farber said.
A 2019 survey conducted by the American Association of University Professors (AAUP) showed that full professors at the University earned an average of $248,000 — the second highest among U.S. institutions, with male and female full professors earning $252,400 and $234,600, respectively. Data from the U.S. Department of Education, compiled by The Chronicle of Higher Education showed male and female full professors were compensated an average of $183,870 and $165,060 in 2012, respectively.
Women comprised 32 percent of the University’s 814 tenured and tenure-track faculty in the 2019-20 academic year, according to the Office of Institutional Research, marking a five percent increase from 2014.
The OFCCP also found two technical violations, both of which the University denied in their entirety. The first involved an alleged failure to “collect and maintain personnel and employment records” and a failure to “conduct adverse impact analyses.”
The second violation involved an alleged failure to conduct “in-depth analyses of the total employment process, including compensation systems to identify the existence of gender-based pay disparities.” The OFCCP also contended that the University failed to develop or execute “appropriate action-orientated programs designed to correct any promotion or pay disparities by gender.”
As part of the agreement, the University will be required to take steps to ensure its compensation practices meet legal requirements and conduct statistical analyses to determine if any significant disparities exist against female full professors.
The University has also agreed to conduct pay equity training for all staff involved in compensation decisions for full professors.
“During the ERCA monitoring period, Princeton will evaluate its compensation practices and periodically report to OFCCP on its analysis using a negotiated model, which OFCCP found acceptable,“ Hawkins wrote to the ‘Prince.’
The agreement revealed that the University had invested $628,000 in September 2015 to develop a new employee applicant tracking system to “collect, track, and maintain all records” by race, ethnicity, and gender for all applicants and hires in its selection process.
“Princeton’s commitment to equity and equal opportunity for all is ongoing,” Chang wrote to the ‘Prince.’
“Current University initiatives — in place before the agreement reached with the OFCCP — include conducting a review of faculty salaries at the time of hire and in the annual merit increase process to ensure equity; engaging in hiring initiatives in fields with low representation of women; and encouraging women to serve in leadership positions, including as department chairs and school deans,” he added.
Editor’s Note: As of Wednesday, Oct. 14, this piece was updated to reflect statements from the Department of Labor.