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Mastercard Proposes $26M to Resolve Discrimination Lawsuit

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Mastercard agrees to pay $26 million to resolve a discrimination lawsuit alleging it underpaid Black, Hispanic and female workers.

New York City, NYMastercard has agreed to pay $26 million to resolve a proposed discrimination class action lawsuit. If approved by a federal judge, the settlement will affect about 7,500 Black, Hispanic and female workers nationwide, starting in 2016, who claimed they were systematically underpaid by the card network.

Pre-litigation settlement discussions began in August 2022. One year later, the parties held an initial mediation session and another session in March 2024, after which they agreed to the monetary terms of the settlement. Plaintiffs Deborah Hayman, G.A. Gomes, L. Kasomo, and S. Brown filed the proposed class action this month in the U.S. District Court for the Southern District of New York, and the settlement was filed at the same time. (According to Reuters, filing both at the same time is a common practice that allows for classes to be formally certified and for court oversight of settlements.) According to their complaint, Mastercard routinely hires women and workers of color into lower-paying job roles. The bias compounded over time as employees received smaller raises and fewer promotions than white men doing the same work.

Mastercard “strongly” denied wrongdoing in the settlement, and by settling the case, Mastercard was “committing to continue to support and deliver for our employees.” A spokesperson for Mastercard said that settling the case was in the best interest of all involved. "It's essential that we have a workplace where all employees feel valued, respected and empowered to reach their greatest potential…It is in the best interest of all involved to bring this matter to a close.”


Mastercard Investigation


The settlement was reached after a thorough investigation into the employment discrimination claims, which included an extensive exchange of data and information, three days of mediation sessions, and months of more negotiations between the Parties.  According to the lawsuit, the investigation included interviewing employees and reviewing documents related to Mastercard's hiring and promotion standards. It found Black, Hispanic and female employees performed similar work and were paid less than their male and white counterparts. It found that, on average, those employees received lower starting levels at hire, even when controlling for age. And because Mastercard assigned them lower job levels when hiring, which stayed with them throughout their employment with the company, they received less compensation during their time with Mastercard.


Mastercard Settlement


As well as cash payments to Class Members, the settlement:
  • Provides independent review of Mastercard’s hiring and promotion policies;
  • Provides significant benefits to Class Members while ensuring a fair and equitable hiring process for female, Black, and Hispanic employees who work for Mastercard across the United States;
  • Mastercard will continue to conduct annual pay equity audits with an external consulting firm for three years;
  • Mastercard will hire an industrial organizational psychologist to review its career ecosystem.
According to court documents, “the Parties have reached an agreement to resolve class  and  collective  claims  of  sex- (including  pregnancy), gender-, race-, or ethnicity-based employment discrimination and pay inequity brought on behalf of individuals who,  according to Mastercard’s records, identify as (1) female, or (2) Black/African American, Latino/Latina/Hispanic, and/or one or more of the foregoing races, who hold or held a Career Level 4 through 10 job located in the U.S. at Mastercard.”

The plaintiffs’ lawyers said the nationwide class includes 7,500 female, Black and/or Hispanic current and former employees who worked at Mastercard as far back as September 2016, depending on the state where they worked. Lead counsel for the plaintiffs said, “We are very pleased to have reached this nationwide settlement with Mastercard, which we believe represents a fair compromise…Importantly, the non-monetary terms of the settlement will help ensure that Mastercard maintains an equitable workplace for the thousands of women and people of color it employs. Settlements like this help to level the playing field and move the entire industry closer to pay equity.”

The case is Deborah Hayman, et al. v. Mastercard, Inc., 7:25-cv-00340 in the U.S. District Court for the Southern District of New York.

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