Apple (NASDAQ:AAPL) is facing a class-action lawsuit filed by two female employees alleging gender-based pay disparities within the company. This lawsuit, filed in a San Francisco state court, challenges Apple’s methods for setting compensation and its performance review policies.
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The legal action, representing 12,000 women employed at Apple, accuses the tech giant of violating California’s equal pay, employment, and unfair business practice laws.
Apple’s Compensation Practices Are Under Scrutiny
Central to the lawsuit is Apple’s compensation practices for new hires. Prior to 2018, Apple considered applicants’ prior salaries, a practice that became illegal under California law that year. After the legislative change, Apple began inquiring about candidates’ salary expectations instead. The plaintiffs contend that this revised approach still contributes to gender pay disparities.
Apple asserts that it has achieved and maintained gender pay equity since 2017. The company conducts regular compensation audits with an independent third-party expert to ensure fair pay adjustments. However, the lawsuit alleges that Apple’s performance review system is biased, favoring men.
Apple’s Risk Analysis
The potential impact of this lawsuit on Apple’s financial standing and reputation remains to be seen. Meanwhile, investors should note that Apple has a history of facing various legal challenges and disputes, often resolving them through agreements or settlements. However, there is no guarantee that favorable terms can always be negotiated or that litigation can be entirely avoided.
As it is subject to several lawsuits, the company’s exposure to legal and regulatory risks is slightly above the industry average. According to TipRanks’ Risk Analysis tool, legal and regulatory risks account for 21.4% of Apple’s total risks, compared to the industry average of 20.3%.
Is Apple Stock a Good Buy?
Apple stock has regained momentum and is up about 10% since the company unveiled “Apple Intelligence,” its suite of AI-powered features, at the Worldwide Developers Conference (WWDC) on June 10. However, macro uncertainty and competitive headwinds keep Wall Street cautiously optimistic about its prospects.
Apple stock has a Moderate Buy consensus rating based on 23 Buys, 11 Holds, and one Sell recommendation. The analysts’ price target on AAPL stock is $209.28, implying 2.32% downside potential from current levels.
