JPMorgan Chase to pay $5 million in parental-leave discrimination claim

JPMorgan Chase & Co. has agreed to pay $5 million to resolve a discrimination claim filed by a male employee who alleged the bank’s parental leave policy was biased against dads.

The payout resolves a 2017 complaint brought by the American Civil Liberties Union alleging bias against Derek Rotondo, who had applied unsuccessfully for the 16-week parental leave benefit available to employees who are the “primary caregiver” of a new kid. JPMorgan doesn’t admit liability in the settlement.

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It’s the biggest recorded settlement in a U.S. parental leave discrimination case, according to Rotondo’s attorneys, and the most high-profile warning to companies with policies that are gender-neutral on paper but not in practice.

“Parents need to be treated with equality,” said Mr. Rotondo, who investigates financial crimes for the bank. “There can’t be an assumption that just because someone is a new mom, she’s going to be doing all the work, and that dads just need to be quiet and get back in the office.”

In the complaint filed with the Equal Employment Opportunity Commission, Mr. Rotondo said the company told him it started from the presumption that a child’s birth mother was the primary caregiver. And because his wife, a teacher, wasn’t incapacitated and had the summer off, he couldn’t qualify.

Mr. Rotondo claimed that the bank’s policy “relies on and enforces sex-based stereotypes” and violates the federal prohibition on workplace sex discrimination. In 2015, the EEOC distinguished between postpartum medical leave, which the agency said could be “limited to women affected,” and leave for bonding with and caring for a new child, which had to be provided equally to men and women.

JPMorgan said its policy was always intended to be gender-neutral. Both sides said the settlement would be filed with the court Thursday.

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The $5 million payment will be shared among other employee dads who also missed out on the longer leave available to primary caregivers, according to Mr. Rotondo’s attorneys. JPMorgan has also agreed to training and monitoring to ensure it equally encourages male and female employees to take leave.

“We are pleased to have reached an agreement in this matter and look forward to more effectively communicating the policy so that all men and women employees are aware of their benefits,” the bank’s associate general counsel Reid Broda said in a statement. “We thank Mr. Rotondo for bringing the matter to our attention.”

The U.S. is one of only a few countries without a national paid parental leave policy, and most companies don’t offer it. In 2018, 35% of companies said they gave new moms paid time off, up from 26% two years earlier, according to a survey by the Society for Human Resource Management. The share of firms saying they offered paid paternity leave rose to 29% from 21%.

Some, like Facebook Inc., say they offer all their employees the same amount of paid parental leave. But many other companies, like Wells Fargo & Co. and Uber Technologies Inc., use a system akin to JPMorgan’s, with more leave for parents who will be the “primary” caregiver of a new child than to those who will be “secondary.”

JPMorgan Chief Executive Officer Jamie Dimon told shareholders in April that last year it increased the amount of paid leave it provides “non-primary parental caregivers” from two weeks to six.

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Companies would be better off just ditching the distinctions, said Peter Romer-Friedman, one of Rotondo’s lawyers. Providing all new parents the same amount of leave is a simpler and superior approach: “It’s easier to administer, and it doesn’t import the stereotypes or the distinctions that our society has artificially set.”

Related Topics: JPMorgan Chase & Co.