Developments in Equal Pay Litigation

© 2021 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 5 Provision is not more extensive than necessary because it is narrowly tailored to only prohibit employers from inquiring about the single topic of wage history to preclude any discriminatory impact of prior salary levels. Employers are free to ask “a wide range of other questions,” including those related to qualifications, work history, skills and any other job-related questions relevant to performance or fit with the company and may still obtain market salary information from other sources. 19 The Third Circuit’s holding and reasoning in Greater Philadelphia is significant, not just because it upheld one locality’s ordinance, but because it did so based on many of the arguments and analyses that underlie the rationale for salary history bans generally, including the alleged scientific bases of a “wage gap” and the purported failure of existing anti-discrimination legislation to address that issue. If the Third Circuit’s decision is any guide to the future, salary history bans will continue to be an important factor in employers’ hiring decisions. 2. State And Local Pay Transparency Initiatives In addition to salary history bans, some states and localities have recently started to enact legislation that requires employers to be more transparent with respect to compensation. Some of those laws require employers to submit annual reports of various pay and hours data for its workforce in a manner very similar to what the EEOC very briefly required as EEO-1 Component 2 of the federal EEO-1 pay report. Other states have experimented with other versions of pay transparency as well. The federal EEO-1 Report is a survey document that has been mandated for more than 50 years. Employers with more than 100 employees, and federal contractors or subcontractors with more than 50 employees, are required to collect and provide to the EEOC certain demographic information (gender, race, and ethnicity) in each of ten job categories . 20 On February 1, 2016, the EEOC proposed changes to the EEO-1 report, which would have required more detailed reporting obligations of “Component 2 data,” specifically, data on employees’ W-2 earnings and hours worked. 21 On August 29, 2017, the EEOC announced that the OMB, per its authority under the Paperwork Reduction Act, had immediately stayed the collection components of Component 2 data. The OMB’s decision was immediately challenged in court. In National Women’s Law Center v. Office of Management and Budget , 22 the District Court for the District of Columbia held that the OMB’s stay was unlawful. Ultimately, the court vacated the stay, holding that it “totally lacked the reasoned explanation that the APA requires. ” 23 The court issued a series of orders that required the EEOC to complete the Component 2 data collections for calendar years 2017 and 2018 . 24 19 Id . at 154-55. 20 For more information, see the EEOC’s dedicated website for data collections : https://eeocdata.org/. 21 See U.S. Equal Employment Opportunity Commission, Agency Information Collection Activities: Revision of the Employer Information Report (EEO-1) and Comment Request , available a t https://www.gpo.gov/fdsys/pkg/FR-2016-02-01/pdf/2016-01544.pdf. 22 Nat’l Women’s Law Ctr. v. Office of Mgmt. & Budget , 358 F. Supp. 3d 66 (D.D.C. Mar. 4, 2019). The OMB had justified its stay based on the fact that the data file specifications that employers were to use in submitting EEO-1 data were not contained in the Federal Register notices. Id. at 87. According to the OMB, this meant that the public was not given an opportunity to provide comment on the method by which employers were to submit data and that the EEOC’s burden estimates did not account for the use of those data specifications. But the court held that the data file specifications merely explained how to format a spreadsheet, they did not change the content of the information collected: “[t]he government's argument therefore focuses on a technicality that did not affect the employers submitting the data.” Id. With respect to the burden estimates, the court noted that the OMB had not found that the data file would change the EEOC’s initial estimates, just that it may do so, an assertion the court said was “unsupported by any analysis.” Id. at 88. 23 Id. at 90. 24 See Order, Nat’l Women’s Law Ctr. , No. 17-CV-2458 (D.D.C. Apr. 25, 2019), ECF No. 71; see also Press Release, U.S. Equal Employment Opportunity Commission, EEOC Opens Calendar Years 2017 and 2018 Pay Data Collection (July 15, 2019), https://www.eeoc.gov/eeoc/newsroom/release/7-15-19.cfm; Order, Nat’l Women’s Law Ctr. , No. 17-CV-2458 (D.D.C. Apr. 25, 2019), ECF No. 71; Order, Nat’l Women’s Law Ctr. , No. 17-CV-2458 (D.D.C. Oct. 29, 2019), ECF No. 91; Order, Nat’l Women’s Law Ctr. , No. 17-CV-2458 (D.D.C. Feb. 10, 2020), ECF No. 102.