Developments in Equal Pay Litigation

44 | Developments in Equal Pay Litigation © 2021 Seyfarth Shaw LLP working day in each of twenty or more calendar weeks in the current or preceding calendar year, and any agent of such a person.” 361 The EPA uses the broader definition found in the FLSA, which defines an “employer” as “any person acting directly or indirectly in the interest of an employer in relation to an employee . . . .” 362 An “employee” is defined as “any individual employed by an employer, ” 363 and the term “employ” means “to suffer or permit to work.” 364 Together, those definitions have been interpreted as “the broadest definition . . . ever included in any one act.” 365 Courts interpreting that definition have focused on the “economic realities” of the purported employment relationship. The “economic realities” inquiry, in turn, focuses on a number of factors related to control over the employee, including whether the alleged employer (1) had the power to hire and fire the employees, (2) supervised and controlled employee work schedules or conditions of employment, (3) determined the rate and method of payment, and (4) maintained employment records . 366 Deciding that issue can be quite complex and often gives rise to significant substantive litigation apart from the actual merits of a lawsuit. For example, in Moore v. Baker , 367 the District Court for the Southern District of Alabama allowed a complaint against alleged joint-employers to proceed, holding that the fact-intensive nature of the joint- employer inquiry required discovery and further factual development. The district court had to consider whether the Board of Trustees was plaintiff’s employer under title VII and the EPA. The court first noted that the term “employer” is defined differently under Title VII and the EPA. 368 Plaintiff alleged that the college and the Board of Trustees should be treated as a single employer because the Board of Trustees has the authority to make rules and regulations for the college, including regarding qualifications for faculty in establishing and maintaining an annual salary schedule . 369 Plaintiff also alleged that the college president was directly responsible to the Chancellor and the Board of Trustees for the college’s day-to- day operations and serves at the pleasure of the Board of Trustees . 370 The court held that those allegations would suffice at the motion to dismiss stage under both statutes, holding that joint- employment was a fact-specific inquiry that was best left to the summary judgment stage . 371 Although these types of issues more typically involve different corporate entities, the EPA’s definition of an “employer” is broad enough to include individual managers or supervisors who are shown to exercise substantial control over the plaintiff’s terms of compensation and work activities. For example, in Gunaldo 361 42 U.S.C. § 2000e(b). 362 29 U.S.C. § 203(d). 363 Id. § 203(e)(1). 364 Id. § 203(g). 365 U.S. v. Rosenwasser , 323 U.S. 360, 363 n.3 (1945). 366 See, e.g., Herman v. RSR Sec. Servs., Ltd. , 172 F.3d 132, 139 (2d. Cir. 1999). 367 Moore v. Baker , No. 18-CV-311-KD-B, 2019 WL 1374674 (S.D. Ala. Mar. 8, 2019). In that case, a Director of Student Support Services at a community college sued her employer(s) for reassigning her to a new position as Adult Education Counselor/Student Services Coach. Id. at *1. The community college subsequently hired a new director of student support services at a higher salary than plaintiff had been paid. Id. at *2. 368 Id. at *6. Under Title VII, an employer is “a person engaged in an industry affecting commerce who has 15 or more employees for each working day in each of 20 or more calendar weeks in the current or preceding calendar year and any agent of such a person.” Id. (quoting 42 U.S.C. § 2000e(b). The definition of “employer” under the FLSA/EPA is: “any person acting directly or indirectly in the interest of an employer in relation to an employee.” Id. at *7 (quoting 29 U.S.C. § 203(d)). The court noted that term is defined more broadly under the FLSA/EPA than under the common law. Id. In order to determine whether persons or entities are employers under the FLSA/EPA, courts look to the economic reality of the circumstances concerning whether the putative employee is economically dependent upon the alleged employer. Id. 369 Moore , 2019 WL 1374674, at *6. 370 Id. 371 Id. at *7. Similarly, in Jafri v. Signal Funding LLC , No. 19-CV-645, 2019 WL 4824883 (N.D. Ill. Oct. 1, 2019), the Chief Operating Officer of a financial company brought a claim under the federal and Illinois Equal Pay Acts, alleging that she was paid less than five of her male subordinates. Id. at *1. The complaint was brought against plaintiff’s employer entity, as well as affiliated entities and the founder and Managing Partner of the corporate parent of those affiliated entities. Id . The employer argued that the complaint failed to allege that the affiliated entities had any control over plaintiff’s pay. Id . at *4. However, the district court held that, “the allegation that she was employed by these entities is sufficient to plausibly allege that the entities had some control over her pay. This is particularly so when one individual – defendant [founder] – owns all three entities and is alleged to have directed [plaintiff] to move from Illinois to Florida in order to be able to more effectively work for all three entities.” Id . The district court therefore allowed the case to proceed to discovery in order to determine, among other things, whether each of the defendants had the alleged control over plaintiff’s compensation. Id .