Developments in Equal Pay Litigation

© 2021 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 7 CASE LAW DEVELOPMENTS IN 2020 AND EARLY 2021 Employers’ compensation practices are increasingly being challenged in court by aggressive plaintiffs’ counsel, the Equal Employment Opportunity Commission, and state agencies. The primary targets for this type of litigation have been companies in the health, education, finance, legal, and technology industries. Those cases continue to reshape the landscape of equal pay litigation across the country. A. Proving The Prima Facie Case The federal EPA utilizes a burden-shifting mechanism for establishing liability. First, an employee must establish a prima facie case of discrimination by showing that: (1) different wages were paid to employees of the opposite sex; (2) the employees performed equal work requiring equal skill, effort, and responsibility; and (3) the employees shared similar working conditions. State laws can differ with respect to these factors, but most state laws share a similar burden-shifting framework. Employees must first prove the basic elements of a cause of action before the burden shifts back to the employer to show that the alleged wage disparity is for some legitimate, non-discriminatory reason. There is no requirement under the federal EPA for a plaintiff to prove any discriminatory intent or animus on the part of the employer. If the employee establishes a prima facie case, the burden of persuasion then shifts to the employer, who has an opportunity to show that the alleged wage differential is the result of a legitimate, non- discriminatory reason. Under the federal EPA, the permissible range of legitimate reasons for a wage disparity are explicitly set forth in the statute as four affirmative defenses. They are: (1) a seniority system; (2) a merit system; (3) a system which measures earnings by quantity or quality of production; or (4) any factor other than sex. The fourth defense, the so-called “factor other than sex” defense is a catchall provision that attempts to account for the wide variety of legitimate non-discriminatory reasons that an employer may have for paying one employee differently from another employee of the opposite sex. Like the factors used to establish a prima facie case, the affirmative defenses allowed by individual state laws can be different from those established by the federal EPA. However, with some exceptions, most of those affirmative defenses would also qualify as an affirmative defense under the federal EPA’s catchall “factor other than sex” defense. Accordingly, this analysis will focus on developments under the federal EPA, while noting significant variations in state law where appropriate. This burden-shifting framework forms the skeleton of all EPA claims. It is important to note, however, that even if an employer meets its burden to establish an affirmative defense to an employee’s prima facie case, the employee still has an opportunity to show that the employer’s stated reason for the wage disparity is merely a pretext for discrimination. 1. Establishing A Wage Disparity The first and most fundamental element of a plaintiff’s prima facie case is establishing that a wage disparity exists; i.e., that different wages were paid to employees of a different gender for the same work. In a case that involves just one or a handful of plaintiffs, this might only require the identification of one or more alleged “comparator” employees who are of the opposite sex and who were paid at a higher rate. This requirement is often not difficult to meet. Courts often hold that a prima facie case has been established if there is just one member of the opposite sex that is paid more, even where the plaintiff is better paid then most other comparable employees of the opposite sex. For example, in Gutierrez v. City