Developments in Equal Pay Litigation

30 | Developments in Equal Pay Litigation © 2021 Seyfarth Shaw LLP difference in pay based on the difference in what employees were previously paid is a legitimate factor other than sex under the EPA. 225 Relying on that precedent, the Seventh Circuit held that a pay discrepancy that was created in reliance on prior salaries is not a violation of the EPA unless sex discrimination led to the lower prior wages. 226 The Eighth Circuit has also followed this line of reasoning. 227 Other Circuits have held differently. For example, in Irby v. Bittick , 228 the Eleventh Circuit held that “[w]hile an employer may not overcome the burden of proof on the affirmative defense of relying on ‘any other factor other than sex’ by resting on prior pay alone, as the district court correctly found, there is no prohibition on utilizing prior pay as part of a mixed-motive, such as prior pay and more experience. ” 229 The Tenth Circuit has also held that prior salary cannot stand alone as a defense to an EPA claim. In Angove v. Williams-Sonoma, Inc. , 230 a male retail employee argued that the district court had impermissibly applied a “market factor” theory to evaluate his claim, arguing that it is impermissible to justify a wage disparity solely upon the “going market rate” for employees of a certain gender . 231 The Tenth Circuit held that this theory only arises where an employer purports to rely on the “going rate” for employees based on their gender . 232 Although setting an employee’s salary based solely on what the market would pay male versus female employees would clearly violate the EPA, there was no evidence to suggest that is what happened. 233 The Tenth Circuit concluded that “where an employer sets a new employee's salary based upon that employee's previous salary and the qualifications and experience the new employee brings, the defendant has successfully invoked the Act's affirmative defense. ” 234 This is because “the EPA only precludes an employer from relying solely upon a prior salary to justify pay disparity.” 235 more demanding than, the work performed by her male predecessor. However, the Department argued that the pay discrepancy was based on non-discriminatory bases, including the employees’ prior salaries. Id. at 908-09. 225 Id. at 908 (citing Wernsing v. Dep't of Human Servs. , 427 F.3d 466, 468 (7th Cir. 2005); Dey v. Colt Constr. & Dev't Co. , 28 F.3d 1446 (7th Cir. 1994); Riordan v. Kempiners , 831 F.2d 690 (7th Cir. 1987), and Covington v. S. Ill. Univ ., 816 F.2d 317 (7th Cir. 1987)). 226 Id. at 909. Given the salary history, as well as some budget concerns that also impacted the pay decision, the court held that no reasonable juror could find that plaintiff was paid less because of her sex, and upheld the grant of summary judgment to the Department. Id. 227 See Taylor v. White , 321 F.3d 710 (8th Cir. 2003). In Taylor , a female civilian employee of the Army alleged that her pay at a lower pay grade than her male peers was a violation of the EPA. Id. at 713. The Army sought summary judgment, arguing that the pay disparity was the result of its non-statutory salary retention policy that was intended to retain skilled workers and protect workers’ salaries. Id. at 716. The employee argued that, as a matter of law, an employer should not be allowed to rely on prior salary or a salary retention policy as a defense under the EPA because those factors would permit the perpetuation of unequal pay structures. Id. The Eighth Circuit examined the Circuit split and, in particular, adopted the reasoning of the Ninth and Seventh Circuits in Kouba and Covington over that of the Eleventh Circuit (discussed below). Id. at 718-19. The Eighth Circuit concluded: “we believe a case-by case analysis of reliance on prior salary or salary retention policies with careful attention to alleged gender-based practices preserves the business freedoms Congress intended to protect when it adopted the catch-all ‘factor other than sex’ affirmative defense. To conduct a reasonableness inquiry into the actions of the employer or to limit the application of a salary retention policy to only exigent circumstances would, we believe, unnecessarily narrow the meaning of the phrase ‘factor other than sex.’” Id. at 720. 228 Irby v. Bittick , 44 F.3d 949 (11th Cir. 1995). 229 Id. at 955 (citing Glenn v. Gen. Motors Corp ., 841 F.2d 1567, 1571 n.9 (11th Cir. 1988)). 230 Angove v. Williams-Sonoma, Inc. , 70 Fed. Appx. 500 (10th Cir. 2003). 231 Id. at 507. The employee relied on prior Eleventh Circuit and Supreme Court precedent, Mulhall v. Advance Security, Inc. , 19 F.3d 586, 596 n.22 (11th Cir. 1994) and Corning Glass Works v. Brennan , 417 U.S. 188 (1974). In Corning Glass Works , the Supreme Court rejected an argument that an employer's higher wage rate for men on the night shift was permissible, holding that: “The differential arose simply because men would not work at the low rates paid women inspectors, and it reflected a job market in which [employer] could pay women less than men for the same work. That the company took advantage of such a situation may be understandable as a matter of economics, but its differential nevertheless became illegal once Congress enacted into law the principle of equal pay for equal work.” 417 U.S. at 204-05. 232 Angove , 70 F. App’x at 508. 233 Id. 234 Id. 235 Id. (emphasis in original). The Sixth Circuit has also adopted the reasoning of the Eleventh and Tenth Circuits. See Perkins v. Rock-Tenn Servs., Inc. , 700 F. App’x 452, (6th Cir. 2017); Balmer v. HCA, Inc ., 423 F.3d 606, 612 (6th Cir. 2005), abrogated on other grounds by Fox v. Vice , 563 U.S. 826 (2011).