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Leong v. Sap America, Inc.

United States District Court, N.D. Illinois, Eastern Division

September 17, 2014

ALICE LEONG, Plaintiff,
v.
SAP AMERICA, INC., SAP AG, and ANGELIKA DAMMANN, Defendants

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[Copyrighted Material Omitted]

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For Alice Leong, Plaintiff: Robert Anthony DeStefano, LEAD ATTORNEY, Robert A. DeStefano and Associates, P.C., Berwyn, IL.

For SAP America, Inc., a Delaware Corporation, SAP AG, a German Corporation, Werner Brandt, Angelika Dammann, Defendants: Nina G. Stillman, LEAD ATTORNEY, Morgan Lewis Bockius, Chicago, IL; Charis A. Runnels, Morgan Lewis & Bockius, LLP, Chicago, IL.

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MEMORANDUM OPINION AND ORDER

John J. Tharp, Jr., United States District Judge.

In this employment-discrimination case, Plaintiff Alice Leong alleges that her former employer, defendant SAP, underpaid her relative to male employees because she is a woman. She therefore claims discrimination based on sex under Title VII of the Civil Rights Act, 42 U.S.C.A. § 2000e et seq., as well as unequal pay and retaliation under the federal[1] and Illinois[2] equal-pay statutes, and, finally, breach of contract. SAP moves for summary judgment, and for the reasons that follow, the motion is granted.

FACTS

Headquartered in Germany, SAP AG is " a world leader in enterprise applications in terms of software and software-related service revenue." Compl. ¶ 8. SAP America (" SAP" ), plaintiff Leong's former employer,[3] is the subsidiary that oversees the company's operations in the United States. For purposes of this opinion, the SAP defendants will be referred to collectively as " SAP" unless more specific identification is otherwise required. The third defendant, to whom Leong's retaliation claim is directed, is Angelika Dammann, Chief Human Resources Officer and Labor Relations Director of SAP AG, who from July 2010 to November 2010 was Leong's direct supervisor.

Plaintiff Alice Leong--formerly Alice Conlin--began working for SAP in 1997 as a Segment Manager for SAP's Consumer Products Industry Center of Expertise, and she continued working for SAP until March 16, 2011. In 2006, Leong applied for, and was hired for, a promotion to a human resources position that would come to be known as Vice President, Global Diversity. The functions of this position were not new, but the consolidation of those functions and responsibilities in a dedicated position was new within SAP's human resources department. Before this promotion, Leong had no human resources experience and had never taken any classes related to human resources or diversity other than internal training.

On September 21, 2006, Leong received an email from David Kaput, Senior Vice President of Global HR Practices and Governance, her direct supervisor in the new position, " to confirm the key position/promotion details we discussed." Leong Dep. Ex. 8, Dkt. # 91-1 at 65. The email set forth, among other things, the job title, reporting structure, salary, target bonus, benefits, and review process. The annual base salary was $126,500 with a target

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bonus of $63,250.[4] The " review" section stated that Leong would receive a normal performance and compensation review at year-end 2006 and " special mid-year 2007 review (in Jul 2007) of perf/comp with potential mid-year base salary adjustment." The email also confirmed that Leong would " continue to be an 'at-will' employee."

On November 1, the effective date of the promotion, Leong signed a " Confirmation of Promotion" which is described therein as " an offer" for the Grade Level I position of Global Diversity Vice President. The offer refers to the salary increase to $5,270.83 semi-monthly ( i.e., $126,500 annually), " subject to business performance and company policy relative to promotional increases." Leong signed the " acceptance" portion of the document, which stated: " I accept this promotion offer and acknowledge the terms above as well as the fact that this offer does not constitute a contract of employment and my SAP employment remains 'at-will.'"

Before the compensation for Leong's new position had been finalized, Kaput had recommended a higher base salary for the job. A compensation consultant, Emily Simolike, did a compensation analysis and determined that " external benchmark data for the position indicated that the base salary in the 50th percentile was $185,000 and the 60th percentile was $208,000." She ultimately recommended a base salary of $150,000 with total target compensation of $250,000 with bonus. Kaput, in turn, recommended a base salary of $140,000 with a target bonus of $70,000. He forwarded the recommendation to Joerg Staff, then a Human Resources Business Partner working under Claus Heinrich, the Chief Human Resources Officer. Kaput noted that the proposed salary was " significantly below the market and SAP benchmarks." Thiele Dec. Ex. A, Dkt. # 91-4 at 7. Staff rejected the recommended compensation. Specifically, Staff wrote that he " could not support" the $140,000 salary for Leong because " from the start the overall promotions increase should not be higher that 10%--better less." Thiele Dec. Ex. A, Dkt. # 91-4 at 7. Leong's salary before her promotion was $114,843. Kaput then reduced the starting salary to $126,500 (a 10 percent increase, if rounded to the nearest $500) and obtained Staff's approval.

Thus, in 2006, the year of her promotion, Leong's base salary was $126,500, and her target bonus was $63,250. This annual base salary was below what was listed as the grade level I minimum for 2006. Leong received a bonus for calendar year 2006 that was 118.5% of her target. Leong did not receive an increase in her base salary or target bonus for 2007, nor did she receive a salary or performance review at mid-year 2007. Her 2007 bonus was 115% of target, and in 2008, her annual base salary increased to $135,987.50, and her target bonus increased to $67,993.75. The 2008 base salary was still below the grade level I minimum. Leong's 2008 bonus was 121% of her target; she did not receive an increase in her base salary or

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target bonus for 2009. Leong's 2009 bonus was 186% of her target, and for 2010 she received a salary increase to $148,226 and increase in her target bonus to $74,133. This salary increase placed her above the minimum for grade I.

According to Frank Reing, the Vice President of " Total Awards" for SAP America, who is responsible for the compensation program, two factors might contribute to an employee being paid below the salary range for the grade level assigned to his or her position: (1) the individual's level of " skills and experience" ; (2) the " scope and reach" of the job compared to others. Reing Dep. 65-66, Dkt. # 91-2 at 5. According to Reing, there is no guideline or practice at SAP about where an employee is placed with a pay grade range when they are newly hired or promoted: " [i]t depends on the person." Moreover, according to Reing, the " minimum" salary is " not a floor."

During Leong's tenure as vice president for global diversity, SAP bestowed salary increases on various other HR directors and managers that constituted raises in excess of 10%. Frank Reing received increases of 10.6%, 14.3%, and 14.9% (in addition to other raises) between 2006 and 2011. Mark Steinke, who held various HR recruiting positions, received salary increases of 13.8% (less than a year after a 7.4% increase), 12.2%, 13.5% and 13.4% between 2005 and 2008. Claudio Vespucci, a human resources director, received salary increases of 10.9% and 20.1% between 2007 and 2011.

In February 2010, Leong became the " Global Vice President, Global Diversity." [5] She received an email from Stefan Reis that states, as to " a change in your position title and salary," that " your new base salary is 148,226 USD (a raise of about 17.1 percent) and your target bonus percentage is 50%....The title of your position is Global VP and the grade level is I." Thus, Leong continued in her grade I compensation level and was not placed in Grade II, which was generally the grade assigned to " global vice presidents." Reing was not aware of any person within SAP allowed to use the title of Global Vice President--a term used only in the United States--who was paid at grade level I.

At several points in 2010, Leong raised the issue of the appropriateness of her salary with various individuals within SAP. She inquired about being paid below the minimum for her grade and not being paid on the global VP scale, grade level II. She was told that she was " on target" in her current grade level classification. In particular, on July 15, 2010, Laura Thiele, an executive in SAP America's human resources department, stated that there might be " confusion with the use of the global title, yet not aligning [Leong] to the global VP grade of II." Thiele explained: " Your role is not at the II level. In hindsight, perhaps we should not have enabled you to use the global HR VP title on your signature line if this created the perception that you were being promoted to global VP role." Later in 2010, Leong continued to send emails--including to Frank Reing and to Baerbel Ostertag, the human resources " business partner" for Leong--about her compensation. In a November 2010 email to Ostertag, Reing confirmed that Leong's compensation should not be changed at that time. Leong never complained to Ries, Staff, Ostertag, Thiele, or Dammann that there was discrepancy in her pay due to her gender.

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As of December 31, 2006--roughly the time of Leong's promotion to vice president--there were ten SAP America employees in a human resources role who were paid in grade level I. Leong is the only one whose salary was below the minimum of the salary range. One woman's salary was higher than the maximum; one woman and one man were paid in the top half of the range; one woman and one man were at the midpoint; and three women and one man were paid in the lower half of the range.[6] In the next three years, it continued to be the case that only Leong was paid below the minimum range, among that same cohort. The remaining employees, men and women, were paid along all ...


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