Qualcomm to Pay $19.5 Million to Settle Gender Bias Claims

The chip maker also has agreed to change its practices and policies, which some current and former employees said discriminated against women.

mobile chips

Qualcomm, the world's largest supplier of processors for smartphones and other mobile devices, reportedly will pay $19.5 million to settle a dispute with current and former female employees who claim the company discriminated against women in terms of pay and promotions.

In addition, as part of the settlement, Qualcomm officials also agreed to change its business practices and policies and put in place practices designed to guard against gender bias within the company, including hiring two independent consultants who will work with Qualcomm officials to ensure a more equitable workplace for women. The chip maker also will appoint a compliance official to enforce the new policies.

Almost 3,300 current and former employees—most of whom worked in such areas as science, technology, engineering and math (STEM) jobs—were listed as plaintiffs. The settlement comes before a lawsuit had been filed and after months of negotiations and mediation between the company and lawyers for the plaintiffs. The lawsuit and settlement need to be filed in the courts before a judge can make his decision.

"It is common knowledge that women in STEM and other related fields face persistent discrimination in pay and promotions," David Sanford, chairman of law firm Sanford Heisler and lead counsel for the plaintiffs, said in a statement. "This settlement represents a giant leap forward toward leveling the playing field and can serve as a model of best practices for other technology companies."

Sanford lauded Qualcomm for reaching a settlement without having to be taken to court.

Christine Trimble, vice president of public affairs at Qualcomm, said in a statement sent out to new organizations that while the chip maker has a "strong defense to the claims," executives instead "elected to focus on continuing to make meaningful enhancements to our internal programs and processes that drive equity and a diverse and inclusive workforce. … Qualcomm is committed to treating its employees fairly and equitably."

According to the complaint, policies at Qualcomm made it difficult for women to get promoted, and were particularly hard on working mothers. Promotions came via a sponsorship system in which managers—most of whom are men—chose those they wanted to see promoted rather than allowing anyone interested to apply for the job. In addition, women in STEM and related jobs were paid less than their male counterparts.

Women are in less than 15 percent of jobs that Qualcomm defines as senior leadership positions, according to the complaint.

The settlement comes at a time when workforce diversity within the tech industry is getting increasing scrutiny. A growing number of vendors—including Google, SAP, Apple, Facebook and Twitter—are looking to make their workplaces more open to women and under-represented minorities.

Qualcomm rival Intel last year pledged to spend $300 million over five years to increase the diversity of its workforce, with the goal to reach full representation of women and under-represented minorities at all levels of the company by 2020. In a report released in February taking a look at the first year of the initiative, the chip maker had made progress, though it was slow.

The proportion of women within the company's 106,000-plus workforce increased to 24.8 percent by the end of last year, a jump from 23.5 percent a year earlier. The percentage of under-represented minorities—including African-Americans, Native-Americans and Hispanics—grew from 12.3 percent at the end of 2014 to 12.4 percent by the end of last year. Overall, at the time of the report, 75.2 percent of Intel's workforce was male, 53.3 percent was white and 32.8 was Asian.

When announcing the diversity plan in January 2015 at the Consumer Electronics Show, Intel CEO Brian Krzanich said it was more than simply creating a better company.

"This isn't just good business," Krzanich said. "It's the right thing to do. … It's not good enough to say we value diversity, and then have our workforces and our industry not reflect the full ability and talent pool of women and under-represented minorities."