Why Jennifer Lawrence Won't Sue Over Pay Inequality (Guest Column)

Gender pay disparity has become Topic A among A-list actresses, but applying a tough new California law to Hollywood studios could prove difficult, writes a top employment lawyer.
ILLUSTRATION BY Ross MacDonald

This story first appeared in the Oct. 30 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

When Patricia Arquette devoted a portion of her Oscar acceptance speech to speaking out against gender pay inequality, few expected her words to reverberate much beyond the walls of the Dolby Theatre. Yet nearly eight months later, Gov. Jerry Brown signed into law the California Fair Pay Act, and the bill's author credits Arquette for giving the measure helpful momentum. Gender pay inequality also has been spotlighted recently by documents leaked in the Sony hack and by celebrities including Jennifer Lawrence, who on Oct. 13 wrote an essay titled "Why Do I Make Less Than My Male Co-Stars?"

The law itself, however, is much more complicated than the commendable and seemingly simple goal of ensuring workers are not paid differently because of their gender. The requirement of "equal pay for equal work" long has been enshrined in California employment law, but the Fair Pay Act changes the existing law in several significant respects.

Previously the law read: "No employer shall pay any individual … at wage rates less than the rates paid to employees of the opposite sex in the same establishment for equal work." The new law replaces the phrase "equal work" with "substantially similar work" and removes the requirement that the employees being compared work in the same establishment.

The Fair Pay Act also places the burden on the employer to show that any wage differential is based on one or more of these factors: a seniority system; a merit system; a system that measures earnings by quantity or quality of production; or a bona fide factor other than sex, such as education, training or experience. Even if the employer makes this showing, the employee can succeed by showing an alternative practice exists that would serve the same business purpose without producing the wage differential.

Given Hollywood's role in publicizing the issue of gender pay inequality, it is ironic the Fair Pay Act is nearly impossible to apply to actors and actresses. To begin with, the law applies only to an "employer" and its "employees." In many instances, actors are employed not in the traditional sense but by their own "loan-out companies." Taken literally, that means an actress only would be able to compare her own pay to herself and could bring a lawsuit only against a company she owns.

Similarly, individual production companies often are set up to produce movies and television shows — meaning even if we examine the employment relationship at a level one step beyond an actress' loan-out company, that would permit pay comparisons only among actors and actresses working on the same project. In an effort to avoid these stumbling blocks, an actress bringing a Fair Pay Act lawsuit likely would argue that she was jointly employed by a movie studio or television network. But studios and networks, in turn, can take steps to try to avoid being viewed as "joint employers."

Most employees receive a straightforward salary or hourly rate, and possibly a bonus. However, courtrooms have been filled with directors, producers, actors and actresses trying to sort out whether they were paid properly for work on a movie or TV show. If an actress negotiates a lower upfront "salary" but higher future profit-participation potential, does that mean she is being paid more or less than an actor who negotiates higher upfront payments but lower profit participation?

Nor is it clear what would constitute "substantially similar" work for actors. Whereas large companies might have numerous employees who perform similar jobs, every film, TV show and commercial is different. Two roles might even have similar amounts of screen time, but one is considered more significant. How do you compare an actor's role on a network show to an actress' role on a show for Netflix? How about a lead role in an indie movie versus a supporting role in a studio's summer blockbuster? What about the value of acting in a drama, comedy or "dramedy"?

If a pay disparity exists, then the employer must show it owes to "a bona fide factor other than sex, such as education, training or experience." Is an award nomination a "bona fide" factor? What about age or physical appearance? How do you determine if one role is more difficult than another role? Education is one of the factors, but few would contend a degree from Juilliard translates meaningfully into ratings or box-office revenue.

Employers throughout California are preparing for Fair Pay Act litigation by conducting analyses to determine whether gender pay disparities exist, working to understand the cause of any disparities then deciding whether to change their policies and practices. However, the entertainment industry's unique nuances, combined with general reluctance by talent to sue, makes it unlikely we will see many Fair Pay Act lawsuits filed under actresses' names. To be sure, though, "Fair Pay Act" will be tossed across bargaining tables in an effort to gain pay information and negotiating leverage. Networks and studios must be ready to justify compensation offers with data to support their positions.

Ultimately, the greatest industry impact of the law might be that it has heightened awareness of gender pay equity issues.

Geoffrey DeBoskey heads Sidley Austin's Los Angeles employment and labor practice group. The views expressed are his own.

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