U.S. companies are fighting hard in the war for loyal talent. Their strategy?

Being really, really nice.

Salary makes up a smaller part of compensation than it used to, and lifestyle benefits are filling in the gap. According to a Bank of America report, a survey of 2,000 employees found that 88% would consider lower-paying jobs to get better perks. Paid time off, onsite fitness centers, casual dress, catered meals and a constant flow of free coffee are all approaching standard as companies work to attract and retain their people.

But amid the deluxe whirlwind of benefits, the saying holds true­—no good deed goes unpunished.

 

The Lawsuit

 

In 2003, New York-based Estee Lauder, one of the world’s leading manufacturers of skin care, makeup, fragrance and hair products, implemented an exceptionally generous parental leave policy. In addition to the 12 weeks of unpaid leave required by law, “primary caregivers” were offered 6 weeks of paid leave specifically for “child bonding,” along with flexible return-to-work benefits. “Secondary caregivers” were offered two weeks of paid leave.

The policy is certainly warmhearted on paper. However, in 2017, a male stock worker at a Maryland store, requested six weeks of child bonding leave as the primary caregiver and was denied. He was granted two weeks, as the cosmetic company claimed the “primary caregiver” designation was intended only for mothers and those in “surrogacy situations.”

On August 30, 2017, the Equal Employment Opportunity Commission filed a lawsuit against Estee Lauder, stating the additional parental leave policy discriminated against male employees. The EEOC claimed the practice of allowing women six weeks and men only two weeks, violated the Civil Rights Act of 1964, outlawing discrimination based on race, color, religion, sex and national origin. The policy also was found in conflict with the Equal Pay Act of 1963—outlawing wage disparity based on sex.

 

Costly Consequences

 

Estee Lauder paid a $1.1 million settlement to the class of 210 male employees who received two weeks of paid leave, as compared to the six weeks offered to new mothers. Sex-neutral criteria was used to revise return-to-work policy, ensuring equal benefits for both mothers and fathers. Benefits were applied retroactively to all employees who experienced birth, adoption or foster placement since the beginning of 2018, and training on sex discrimination was mandated by court decree and monitored by the EEOC.

A weighty consequence for such a well-meaning idea. Fortunately for us, we can learn a few things from a distance.

 

Take-Aways

 

“Parental leave policies should not reflect presumptions or stereotypes about gender roles,” Philadelphia District Office Attorney Thomas Rethage said. “Mothers and fathers should be treated equally.”

This equal treatment applies not only to parental leave, but to all benefits offered beyond what is required by law.

With the rising corporate trend of providing extended parental leave and other lifestyle benefits, companies must ensure treatment consistent with the prohibition of discrimination based on sex. Sincere, routine attention to policy and practices is necessary in catching unwritten stereotypes and protecting against disparate treatment.

Kindness can quickly turn unkind if not shown equally. Fair company values must match the way a company actually operates; otherwise, generous perks are an expensive and empty investment.