SEC merit-pay system ruled discriminatory to Blacks and older workers

Jet, Sept 24, 2007

Older and African-American employees suffer discrimination in a merit-pay system put in place at the Securities and Exchange Commission (SEC) in 2003, a federal arbitrator has ruled.

The National Treasury Employee Union (NTEU), which challenged the SEC's merit-pay system, declared the ruling to be an important legal victory for SEC employees, and a warning for other federal agencies considering pay-for-performance plans.

The case, decided by arbitration, found the SEC's merit-pay plan discriminated against employees 40 and older, and African-American employees in higher pay grades. The arbitrator ordered the SEC and the union to propose appropriate remedies within 60 days.

The NTEU has sought retrospective pay raises and compensatory damages for employees it claims were discriminated against based on age and race. It also wants the SEC to eliminate "overly subjective" criteria from merit-pay reviews and adopt a "valid system for recognizing and rewarding employee performance" at the agency that oversees U.S. markets and brokers.

--Associated Press