Experts in Economics & Statistics

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More About Employment Discrimination

Case Insight: Differences in Pay

As an example, consider a case where a pay differential, estimated across all members of an alleged class of employees, masked considerable variation between employees in different jobs.

An opposing expert estimated a pay regression for hourly employees working at a service providing company and identified an aggregate pay differential to the detriment of women. Among other problems with the regression, this estimated pay difference is at best an average measure. It cannot inform whether common patterns in outcomes are present throughout the proposed class.

We looked beneath the aggregate result and found considerable variation between jobs in the estimated pay differentials between women and men. The pay differentials among employees in the same job varied in size, from very close to zero to differences of approximately 3% in either direction. Of the twenty- three positions analyzed, just eight showed differentials to the disadvantage of women.

In the remaining positions women were actually advantaged relative to men.
The absence of a uniform pattern – illustrated by the size and direction of the estimated differentials varying between jobs – was confirmed through a statistical test that rejected the equality of these differentials across jobs. This demonstration of variability undermined the notion of a common class of employees.

Case Insight: Hiring into Entry Level Positions

In this example, an accurate model of the hiring process showed African Americans were favored in hiring, despite the opposing expert’s claims to the contrary.

The opposing expert failed to account for weekend availability, and other key considerations, in modeling the hiring processes at a national big-box retailer. He claimed the defendant hired fewer African American applicants than expected.

Through communications with the client and careful investigation of the data, we learned that an applicant’s availability to work weekend shifts was a key consideration in deciding whom to hire. Those available to work all of the weekend shifts were more than twice as likely to be hired as applicants who were unwilling to work any weekend shifts. Our analysis correctly incorporated this aspect of the hiring process and our results showed that the number of African American hires was actually higher than would have been predicted by a race-neutral model.

Employment Discrimination Representative Engagements

Welch Consulting was retained by attorneys representing a national electronics retailer to assess and testify about class action claims of race, ethnic and gender based discrimination in hiring, initial assignment, compensation and promotions. Our economists effectively combined external vendor based applicant tracking data and within company information regarding career paths in order to accurately assess the claims based upon groups of similarly situated employees.

Welch Consulting was retained by attorneys representing a large national production and retail company to analyze nationwide class action claims of race, ethnic and gender based discrimination in hiring, promotions, evaluations, testing and terminations. Our economists managed all aspects of company, vendor and labor market data to provide timely analyses on each of these topics.

Welch Consulting was retained by attorneys representing plaintiffs in claims of discrimination in compensation among officers with a California law enforcement agency. A Welch economist testified that a properly estimated model of compensation showed statistically significant differences in pay to the detriment of protected group members.

Welch Consulting was retained by the EEOC to analyze and testify about a matter involving discrimination in layoffs and compensation among partners with a nationally recognized law firm. Our economists analyzed the available data and showed that older partners were statistically more likely than expected to be terminated or offered a reduced compensation package.

Welch Consulting was retained in a consulting capacity to assist a large national outdoor retailing company in answering claims made by the EEOC regarding hiring and promotion practices among protected groups. Our economists translated the data from hard copy applicant materials to an electronic database for analysis and incorporated external sources of labor market availability and interest measures in assessing whether selection outcomes corresponded with interested applicant pools.

Welch Consulting economists were retained to consult for a large national software company to audit company practices in the areas of hiring, promotions, evaluations, compensation and terminations among protected groups. Our economists developed models for each practice and a process for quickly transforming unprocessed company files into analysis ready data suitable for investigation. These audits are performed at regular intervals and the results are presented to the company and its attorneys in a clear, concise manner.

Welch Consulting was retained by a nationally recognized research laboratory to assist in an audit of an existing compensation structure for employees at all levels of employment. Our economists studied the pay practices in place to ascertain whether unexplained differentials existed between groups of similarly situated employees and estimated recommended adjustments in compensation where necessary.