Understanding the Equal Pay Act: A Comprehensive Guide

1. Equal Pay • Requiring equal pay for equal work has been a long, difficult battle • Attempts were made as early as the 1870’s and specific laws failed in Congress from 1945-1962 (mainly due to the use of the word “comparable”) • The Equal Pay Act (EPA), which was passed the year before Title VII, makes it illegal to pay men and women different wages for jobs of equalwork

2. ~ Equal Pay Act (1963) ~ No employer having employees subject to any provisions of this section shall discriminate, within any establishmentin which such employees are employed, between employees on the basis of sex by paying wages to employees in such establishment at a rate less than the rate at which he pays wages to employees of the opposite sex in such establishment for equal work on jobs the performance of which requires equal skill, effort, and responsibility, and which are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex (FOS): Provided, That an employer who is paying a wage rate differential in violation of this subsection shall not, in order to comply with the provisions of this subsection, reduce the wage rate of any employee. The 4 Affirmative Defenses

3. ~ Some EPA Basics ~ • Only deals with sex differences in pay rates (EPA incorporated into • the Fair Labor Standards Act; FLSA) • No minimum requirement of 15 employees (only an opposite-sex • comparator is needed) • No proof of intentis needed • "Opt in" rules under EPA (not "opt out" like Title VII) class actions • Have 3 years to file a claim of a willful violation (rather than 2); • Some public institutions added in 1966 with others included in 1974 • No compensatory or punitive damages allowed (but 3 years back pay and doubling of back pay awards available). Under the FLSA, an award of liquidated damages is equal to the amount of any award for lost or unpaid wages –referred to often as double back pay

5. The Bennett Amendment • Stated purpose of the Bennett Amendment was to resolve any conflicts between Title VII and the EPA • Designed to makes any EPA wage violation virtually an automatic Title VII violation • Allows the plaintiff to file both EPA and Title VII claims for a single violation so long as they do not receive duplicative relief, but instead the maximum amount of relief allowed under both claims • --- The Bennett Amendment: • It shall not be an unlawful employment practice under this title for any employer to differentiate upon the basis of sex in determining the amount of wages or compensationpaid or to be paid to employees of such employer if such differentiation is authorized by the provisions of Section 6(d) of the Fair Labor Standards Act of 1938, as amended

6. However --- • Courts often have found that a EPA victory will notautomatically result in a Title VII victory • Courts have assumed this position for two reasons --- • 1) Prima facie burdens in the EPA establish only that the wage disparities cannot be legally explained • 2) Title VII requires proof of illegal motive (intent). A showing of an EPA violation does not provide an indication of intent as required under Title VII VII rules for Title VII claims Also, courts have differed as to whether the equal work requirement of the EPA is incorporated into Title VII or just the 4 affirmative defenses

7. ~ Equal Work Requirement ~ Cases Where Defendants Lost (Jobs viewed as equal) Different job titles and slightly different work (e.g., “extra” work) does NOT indicate that jobs are unequal

8. Hodgson v. Brookhaven General Hospital (1970) • Established meaning of substantially equal jobs • “Three-prong” test for extra work: • For two jobs to be considered substantially unequal, extra work had to involve: • Extra effort • Significantly more time • Have an economic impact for the company

9. Corning Glass Works v. Brennan (1974) • Corning claimed working conditions were different between night and day shifts (night shift paid more $$ and females were barred from working at night) • Incumbent male workers kept higher wages after pay differences were eliminated (1969) --- “Red Circle” Effect (keeping higher salary of certain employees is only legal if sex-neutral) • The Supreme Court ruled that the “hazards” and “surroundings” at Corning were notsubstantially different across shifts (consistent with Corning's own job evaluation & they abolished differences in pay between shifts in 1969) • Market Forces struck down as an FOS defence • (from Futran v RING Radio, citing Corning and other cases): “Paying a lesser rate simply because the market will bear that rate is impermissible under the Equal Pay Act.”

10. Thompson v. Sawyer (1982) • Male “bookbinders” paid more than female “bindery workers” • Use of different equipment does not make the jobs different • DOL Regulation: Performance of jobs on different machines or equipment would not • necessarily result in a determination that the work so performed is unequal within the • meaning of the statute if the equal pay provisions otherwise apply. • Bookbinders – (N = 279, all males) (classified as a higher wage craft) • Bindery workers (N = 325; all females) (4 levels) • Level 4 (found to be substantially equal to male bookbinder jobs) • Level 3 • Level 2 • Level 1 • Damages for: • EPA violation (pay differential) and • Title VII (lack of promotion; pattern or practice violation)

11. Laffey v. Northwest Airlines (1984) • Male “pursers” and female “stewardesses” performed equal work for • unequal pay • Airline lost under four different defences: • 1) BFSS • 2) fewer benefits for females who might become pregnant • 3) heavy penalties would destroy the airline and • 4) a comparable worth claim that “stewardesses” were less valuable to • the company

12. ~ FOS ~ City of Los Angeles Department of Water and Power v. Manhart (1978) Females paid more into their retirement plan than males (they live longer, so they cost the pension fund more money) Water Department defense: Longevity is a FOS The Department argues that the different contributions exacted from men and women were based on the factor of longevity rather than sex. It is plain, however, that any individual's life expectancy is based on a number of factors, of which sex is only one. The record contains no evidence that any factor other than the employee's sex was taken into accountin calculating the 14.84% differential between the respective contributions by men and women. We agree with Judge Duniway's observation that one cannot "say that an actuarial distinction based entirely on sex is `based on any other factor other than sex.' ….. Sex is exactly what it is based on."

13. ~ The Establishment ~ In most cases, a distinct, physical location But, key criteria is centralized controlover administrative affairs • Brennan v. Goose Creek (1975) • Female janitors were paid less than male janitors • Different janitors worked at different elementary schools • School District defense: Each elementary school is a “separate establishment” • Circuit Court: Ruled against the school district • “Establishment” is defined by “who calls the shots” [Central Administration] • The record reveals that the central administrationof the school district (not the principals of the schools) hired the janitors, determined their wages, assigned them to the school building in which they were to work, and sometimes switched their assignments from one building to another. • Finally, the record discloses that the work schedule and the janitors' daily duties - controlled to a large extent by the central administrators - do not differfrom building to building.

14. Comparable Worth Claims in Title VII • Equal work under EPA is a dichotomy: two jobs either are or are not substantially equal (Usually based on job analysis data) • Comparable Worth represents a continuum of value to the organization • Usually based on job evaluation and internal value to company • For example, A job assigned a value of 100 points is valued at $10/hr • Any other job valued at 100 points should also be worth $10/hr • External worth is based on market forces (outside the organization) • Comparable worth proponents argue female dominated jobs are under-valued because of past social injustices (not supported by the courts)

15. Comparable Worth (cont.) • Lemons v. Denver (1980)―interpreted Bennett Amendment as mandating that jobs must be equalto pursue a Title VII claim -- Nurses (mostly females) underpaid compared to employees in “General Administrative Series” classification. -- Jobs being compared were admittedly different -- plaintiffs lost. • County of Washington v. Gunther (1981) -- Male versus female prison guards (less pay) -- Disparate treatment Title VII suit filed -- Jobs were not substantially equal (e.g., male guards oversaw significantly more prisoners) ** Supreme Court ruled that plaintiffs can tryto make a prima facie claim via Title VII even thought jobs are unequal(e.g., Bennett Amendment does not prohibit Title VII comparable worth claims) • Court did not validate comparable worth • Thus far, plaintiffs have lost every comparable worth case

16. ~Comparable Worth Example Opinion ~ • Alexander v. Chattahoochee Valley Community College • Alexander’s claimed that her job of Admissions Clerk was paid less than two director jobs (Auxiliary Services & Institutional Advancement) Alexander’s argument that her job requires a substantially similar amount of skill, effort, and responsibility is essentially a “comparable worth” claim, or a claim that her job has the same “intrinsic worth or difficulty” … even though it involves doing different work … Whatever its merits as a theory may be, courts have held that comparable worth claims are not cognizable under either Equal Pay Act or Title VII.

17. Use of Statistics in Comparable Worth Claims From AFSCME v Washington (1985) … job evaluation studies and comparable worth statistics alone are insufficient to establish the requisite inference of discriminatory motivecritical to the disparate treatment theory … From American Nurses v. Illinois (1986; referencing AFSCME): The critical thing lacking in AFSCME was evidence that the state decided not to raise the wages of particular workers because most of those workers were female.Lack of intent evidence

18. ~ Role of Past Salary and Market Forces ~ • Market forces argument as a FOS generally found to violate the EPA • Less agreement on the use of prior salary (if prior salary is the only differentiating factor, then FOS defense generally not legitimate) • -- Years of experience and previous salary are the strongest predictors of starting salary, and starting salary is the greatest predictor of current salary Mickey Silberman, A New Day for Pay Discrimination Enforcement, Industry Liaison Group Conference 2011 Kouba v. Allstate(1982): To determine minimum salary, company used ability, education, experience, and prior salary (minimum salary was the only money paid until the training period was over (8-13 weeks) On average, female agents were paid less than their male counterparts Title VII suit filed but company defended prior salary as a FOS

19. From Kouba The Equal Pay Act concerns business practices. It would be nonsensical to sanction the use of a factor that rests on some consideration unrelated to business. An employer thus cannot use a factor which causes a wage differential between male and female employees absent an acceptable business reason. Conversely, a factor used to effectuate some business policy is not prohibited simply because a wage differential results. >>> Allstate used prior salary as a motivating force and to predict performance; that salary corresponds roughly to an employee's ability>>> Relevant considerations in evaluating the reasonableness of this practice include: • The use of other available predictors 2) Less use of prior salary after on-the-job performance is known 3) Whether the employer relies more heavily on salary when the prior job resembles the job of sales agent Update: State of Massachusetts, Philadelphia (private employers), and New York (state employers) have passed laws that disallow past salary inquiries as a condition of employment

20. An Act to Establish Pay Equity St.2016, c.177 • MA law banning the use of prior salary in process of selecting employees (c) It shall be an unlawful practice for an employer to: (1)  require, as a condition of employment, that an employee refrain from inquiring about, discussing or disclosing information about either the employee’s own wages, or about any other employee’s wages.  Nothing in this subsection shall obligate an employer to disclose an employee’s wages to another employee or a third party; (2) screenjob applicants based on their wage, including benefits or other compensationor salary histories, including by requiring that an applicant’s prior wages, including benefits or other compensation or salary history satisfy minimum or maximum criteria; or request or require as a condition of being interviewed, or as a condition of continuing to be considered for an offer of employment, that an applicant disclose prior wages or salary history; (3) seek the salary history of any prospective employee from any current or former employer; provided, however, that a prospective employee may provide written authorization to a prospective employer to confirm prior wages, including benefits or other compensation or salary history only after any offer of employment with compensation has been made to the prospective employee;

21. ~ Paycheck Fairness Act* ~ Factor Other Than Sex = a "bona fide factor other than sex" (BFFOS) • Job-related with respect to the position in question • Consistent with business necessity • Included compensatory and punitive damages • Class action suits from current “opt in” to “opt out” * PFA failed by 2 votes in 2010

22. More on the “Establishment” Meeks v. Computer Associates (1994): Meeks and another females employee were paid less relative to two men at the same location Company: Males and females in Meek’s job paid the same across the nation Court: Decisions were not centrally made (made within each geographic location)

23. Ledbetter v. Goodyear (2007) Summary • Lilly Ledbetter: Worked for Goodyear for approximately 20 years 1979-1998 • In 3/98 filed Title VII and EPA suits; retired in July 1998 • Alleged that early in her career, her salary increases were low because of sex-biased poor performance appraisals by supervisors • -- District Court granted SJD on EPA but let Title VII suit continue • Won case and 3.5 million in damages • 11th circuit reversed ―unlike sexual harassment, which is continuous, pay decisions are discrete acts and charges must be filed within 180 (non-deferral states) or 300 (deferral states) days • Goodyear: Ledbetter had 180 days after each pay decision was made to challenge it. So, her suit was time barred; she waited too long to file • Key Question: What is an unlawful employment action and when does of occur? Discrete act or continuing violation?

24. Supreme Court Decision in Ledbetter Supported Goodyear: • Suit was time barred • Needed to file suit within 180 days of each discriminatory pay decision (e.g., after each discrete act, see National Railroad v. Morgan (2002) • Dissent: • Pay decisions are different from discrete acts (e.g., termination), they occur gradually across time in small increments -- small initial discrepancies may not be seen as meeting criteria for a federal case … • Comparative pay information is often hidden from the employee’s view.

25. Bazemore v. Friday (1986): Disparate treatment claim of pay discrimination. Employees segregated by race (Blacks paid less). Title VII applied in 1972 to public sector – suit filed alleging that pay differences from old system persisted. Court ruled that each new paycheck resulting from an facially discriminatory, intentional pay structure is a new violation – EEOC filing period starts over each time In Ledbetter, facially neutral pay system – no intent proven (EEOC filing period does NOT start over) Dissent: Bazemore supported a continuing violation theory (each paycheck is a new violation; EEOC filing period starts anew Also, dissent noted that the Court used Lorance v. AT&T to support its decision. Lorance was overturned in CRA 1991 -- a facially neutral seniority system adopted with discriminatory intent does not have to challenged immediately 1) Adopted, 2) becomes subject to it, 3) injured by application

26. Lily Ledbetter Paycheck Fairness Act (2009) • An illegal employment act occurs when: • 1) When a discriminatory compensation decision or other practice is adopted • 2) When an individual becomes subjectto a discriminatory compensation decision or other practice • 3) When an individual is affectedby its application of a discriminatory compensation decision or other practice, including each time wages, benefits, or other compensation is paid, resulting in whole or in part from such a decision or other practice. • Act is retroactive to claims of discriminatory compensation pending or after May 28, 2007