WWN News No.17 Sumitomo Metal Wage Discrimination Case
– the Significance of the Victorious Settlement
June 18, 2006, Lawyer Mitsuko Miyachi
The court cases against the three Sumitomo manufacturers were made possible by the determination of the plaintiffs, their supporters, which led to the creation of the Working Women’s Network (WWN), and expectations of the many people drawn to the cause. The series of cases was concluded with a spectacular win in the Sumitomo Metal case. It goes without saying that the victory would not have been possible without the selfless efforts of the plaintiffs and their team of lawyers. At the same time, however, in this case, the analysis of the defeat of the Sumitomo Electric and Sumitomo Chemical cases in the district courts provided an important key. In that sense, the victory is the outcome of having challenged the three companies together. The following is a review of the characteristics of the Sumitomo Metals case compared with the other two.
1. Difference in the System
The structure of discrimination between men and women in the three Sumitomo companies shares the same basis. At the starting point, there is discrimination in the work. The companies’ claims that the hiring categories are different are also the same. There was a difference, however, between Sumitomo Metal and the other two cases, in whether the differences in hiring categories were explicitly set forth in the system. Both in Sumitomo Electric and Sumitomo Chemical, the men hired in the head office category and the women hired in the branch office category were placed in different job classifications within the system (except in the case of Sumitomo Electric, where men and women high school graduates hired between 1968 and 1977, were placed in the same job classifications.). In Sumitomo Metal on the other hand, both men hired in the head office category and women hired in the branch office category were placed in the same “clerical technical job.”
2. Obtaining Internal Personnel Material
Another factor that worked in our favour in the Sumitomo Metal case, was the information on internal materials on personnel that was provided to us. In July 1998, the lawyers acting on this information, applied for an order to produce the internal documents on personnel matters. But the application was denied in September 1999, and the lawyers had to be content to submitting the documents that was provided to them as evidence. These internal documents helped in showing that at Sumitomo Metal, the personnel system separated the employees into 5 categories (U, HTK, BH, LC, general) and their evaluations, as well as pay grades were determined accordingly. Women were designated in the general category, whose evaluation levels were at the lowest, therefore their pay and other grades were also kept at the lowest levels.
3. What We Learned from the District Court’s Sumitomo Electric Decision
The District Court handed down the decision on the Sumitomo Electric case on July 31, 2000. The decision compared the women in clerical jobs with blue-collar male employees, and finding little difference, denied the existence of a gender-based labour management. The lawyers of the Sumitomo Metal case learned from this defeat, and decided to change to strategy to clarifying the situation of blue-collar male high-school graduate employees who transferred to clerical jobs (BH, LC). They applied for an order to produce the pay ledger of high-school graduates in the BH, LC category. As a result, the company produced the ledger for 837 employees. On careful analysis of the documents, we discovered that there was a ledger that the company had not produced. When questioned, it submitted the ledger for a further 312 employees. After analyzing these ledgers thoroughly, in the period 1994-1995, comparing the plaintiffs and the men in BH category, there was a 3.01million to 1.26 million yen pay difference annually, and in comparison with men in the LC category, a 2.02million to0.71million yen difference.
4. Application to Remove a Judge
On March 28, 2001, the District Court decided to dismiss the plaintiffs’ claims in the Sumitomo Chemical case. The framework of the opinion, finding that the gender-based hiring was not against public order and good morals of the time the plaintiffs were hired, was the same as the Sumitomo Electric decision. After having received two dismissals from Judge T. Matsumoto, of the 5th Civil Section, we applied on April 1, 2001, for the removal of the judge due to his gender bias. Because of the application, the trial was interrupted until end of January 2002. In end March 2002, there were personnel changes, Judge Matsumoto transferred to another court, and Judge Osada came in his place. The removal application had effectively served its purpose.
5. District Court Decision
The District Court decision on March 28, 2005, following the above events, recognized the unlawfulness of the discriminatory treatment in promotion and pay between high-school graduate men and women, even when their capabilities were evaluated as being the same. This was the result of the evaluation and grading systems, which was shown in the internal personnel documents. The court ordered the company to compensate for the difference in pay compared with a male LC transferee. The amount was 11.374 million to 18.85 million each, (total 63.112 million yen). The company appealed.
6. Appeal Court Trials and the Settlement Recommendation by Judge Igaki
The case was sent to the 14th Civil Section of the Appeals Court presided by Judge Igaki. Under him, the Sumitomo Electric case concluded on December 24, 2006, with a settlement, whose terms included the plaintiffs’ promotion. His grasp of the issue was apparent in the Sumitomo Metal case as well, and refusing the employer’s application for witnesses, by the beginning of April 2006, recommended a settlement proposal. The company could not refuse the proposal based on the amounts recognized in the first instance, but appropriately including the results of the appeals trial process. And on April 25, 2006, a settlement was reached with the agreement to pay the plaintiffs a total of 76 million yen and to pay due consideration in their treatment in the future.
During this time, the Diet was deliberating the amendment to the Equal Employment Opportunity Law, particularly on the issue of the prohibition of indirect discrimination. The recommendation of the settlement pointed out that while a gender neutral system appears to have been put into place, the gap between men and women have not been appropriately addressed in reality. It warned that, “proper note should be taken that the delay in transforming the awareness, may provide the breeding grounds for new discrimination (indirect discrimination and increase in non-regular employment, particularly for women).” The victorious settlement was possible because we stood up to challenge the system. And the recommendation by Judge Igaki is also our valuable asset.
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On May 22, 2006, Nippon Keizai Shimbun published an article about the
discrimination lawsuits against three Sumitomo employees. A extract from
that article appears below.
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What Discrimination Lawsuits against Three Sumitomo Companies Brought Challenging “Indirect Discrimination”
:Ten-Year Battle, Victorious Settlement
A series of discrimination lawsuits against Sumitomo Electrics, Sumitomo
Chemicals, and Sumitomo Metals recently ended when the last one brought
against Sumitomo Metals was settled out of court. What results did these cases after ten years of court battle bring?
“When you bring a lawsuit against someone, you are working in the dark. I didn’t think in my wildest dream that a victorious settlement was waiting at the end of the tunnel” says attorney Miyaji Mitsuko who handled the three Sumitomo cases.
In August, 1995, nine women working for the three Sumitomo corporations filed lawsuits with Osaka District Court, demanding the elimination of the discrepancy in treatment and wage between male and female employees.
While men with the same educational credentials and tenure assumed important positions in the company and were promoted accordingly, women remained where they started. “It has already been thirty years. The wage difference between men at the section chief level and us is 240,000 yen. We deserve the same opportunity” claimed the women. The employers responded by claiming, “we are talking about different career tracks” and “there is a system in place to allow transfers between the tracks,” and denied the existence of discrimination.
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The women lost in July, 2000 against Sumitomo Electrics, and in March, 2001 against Sumitomo Chemicals and then appealed. In the case of Sumitomo Metals, the “hidden system of personnel management” caught much attention and Osaka District Court ordered the defendant to pay 63,000,000 yen to each of the four plaintiffs. Sumitomo appealed and the second stage of the battle took place at Osaka Appeals Court.
A victorious settlement came in December, 2003. Sumitomo Electrics promoted the two plaintiffs and paid each 5,000,000 yen. In April of this year, the Sumitomo Metals case reached a settlement in which the defendant was to pay 76,000,000 yen to the plaintiffs, more than what the first judge ordered. In both cases, the settlements were a large compromise for the defendants and the women call the settlements “victorious.”
Koedo Shizuko from Working Women’s Network, a group who supported the Sumitomo plaintiffs, told the reporter, “We can attribute the victory partly to our efforts in working with the United Nations Committee on the Elimination of Discrimination against Women and applying external pressure.”
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Osaka Appeals Court stated in its recommendation to settle the Sumitomo Metals case that: “even though it appears as though the past personnel management system was corrected and a gender-neutral system was put in, it is still difficult to say that the inequality between men and women was eliminated”; “we need to give much consideration to the issue so that outdated beliefs will not lead to new forms of discrimination such as indirect discrimination and increase in contingent jobs.”
The Sumitomo cases that lasted for ten years demanded a reconciliation of the past and now are challenging us to consider what to do about new forms of discrimination.