Fix the Problem The First Time

Fix the Problem The First Time

When you know about a pay disparity, fix it before you get told by a court to fix it.

Too often, a company knows of pay disparities between male and female employees.  Yet, the company does not fix the pay disparities—usually arguing there is no money in the budget.

However, years of costly litigation to address pay discrimination may not be in the company’s budget either.

A recent Sixth Circuit case demonstrates the risk that a company takes in refusing to fix pay disparities.  In Briggs v. University of Cincinnati, 11 F.4th  498 (6th Cir. 2021), Lee Briggs, an African American male, was a Compensation Analyst.  The University later hired a Caucasian female as a Compensation Analyst.  Despite having no prior compensation experience, she was paid over $9,000 more than Briggs.

The Director of Compensation knew of the pay disparity but did not immediately correct it for budget reasons.

However, the Director of Compensation later asked the Chief Human Resources Officer for an equity adjustment to Briggs’ pay.  The CHRO’s response was only “we’ll see.”  In a follow-up meeting, she told him, “I’ll think about it.” Over two years later, nothing had been done to close the pay gap.

In a good reminder that men too can bring an Equal Pay Act claim, Briggs filed a Charge of Discrimination and sued under the Equal Pay Act and Title VII.     

The University defended its pay disparity for several reasons, including (1) the female demanded the higher salary as a condition of accepting the job and (2) that the female’s performance reviews were higher.

The Sixth Circuit made short shrift of the salary demand argument. It said:  “No authority supports the concept that an employee’s prior salary or demand for a specific salary is sufficient in isolation to justify a wage differential.  Such a rule would simply perpetuate existing sex-based pay disparities and undercut the purpose of the Act—to require that those doing the same work receive the same pay.”

As for the higher performance reviews, the court said the employer had to show it actually used the performance review scores in setting the pay.  Here, it did not. 

That argument was further undercut by the Director of Compensation testifying he knew there was a pay gap when he hired the female and hoped to close it when the budget permitted.

What is the moral of this story?  When you see a pay disparity, find the money to fix it.  Here, the $9,000 salary increase would have been far cheaper for the University than years of litigation. Plus the fact that litigation of this kind gets the attention of other employees and may lead to additional pay discrimination claims.

The Sixth Circuit reversed the grant of summary judgment and remanded Briggs’s case for trial. So the University is in for more expensive litigation.

Do the right thing the first time.  Fix the problem when you discover it.  The University of Cincinnati did not, and it is paying far more in litigations costs for that mistake than it would have taken to fix the pay disparity.

Stay tuned.

Equal Pay:  Substantially equal ≠ identical

Equal Pay: Substantially equal ≠ identical

Every pay discrimination case involves determining whether the jobs being compared are substantially equal.

The Ninth Circuit Court of Appeals recently reminded everyone that when it comes to determining equal pay, jobs could be substantially equal without being identical. The case is Freyd v. University of Oregon.  For Texas lawyers, note that the Hon. Kathleen Cardone, a United States District Judge for the Western District of Texas, sat by designation on the Ninth Circuit panel, issuing this opinion.

Here, Jennifer Freyd is a highly respected and well-known Professor of Psychology at the University of Oregon.  Freyd learned that she was paid thousands of dollars less each year than several male Professors of Psychology.  After requesting a retroactive raise and being denied it, Freyd sued under the Equal Pay Act, Title VII, and various Oregon state laws. 

After the District Court granted a summary judgment in part, the Ninth Circuit reversed it. The key issue on appeal was whether Freyd’s job as Professor was “substantially equal” to that of the other male Professors in the Psychology department.

 Freyd had to prove that the jobs being compared were “substantially equal.”  However, as the Ninth Circuit reminded us, “substantially equal” does not necessarily mean “identical.” 

Instead, the crucial finding on equal work is whether the jobs compared have a “common core of tasks.”  Once a plaintiff establishes there are a common core of tasks, then the court has to determine whether any additional tasks for one job but not the other is enough to make the two jobs substantially different.  That decision is made on a case-by-case basis.

 The Ninth Circuit reminds us it is the “overall job” and not its individual segments that must be compared.  Here, the Ninth Circuit found that a reasonable jury could conclude that Freyd and her male peers all shared the same “overall job.”  As full professors, they all conducted research, taught classes, advised students, and served on university committees, and performed other acts of service to the university. 

 Though there were differences because they did not teach the same courses, manage the same research centers or supervise the same doctoral students, the Ninth Circuit said that the jury must be the one to decide whether those differences make the professors’ jobs unequal.

The Ninth Circuit was critical of the “granularity” with which the District Court picked through the facts.  It said that such a granular approach guts the broad remedial purpose of the Equal Pay Act and strips it of the protections offered. 

It reminded us Congress wanted the Equal Pay Act to be broadly construed to accomplish the purpose of eliminating unequal pay between the sexes.

This opinion from the Ninth Circuit gives us a good roadmap on how to show that jobs are substantially equal.

But Your Husband Has A Job…

But Your Husband Has A Job…

For decades, companies paid female employees less because “her husband has a job” or because a male coworker “has a family to support.” Finally, a court called this pay practice what it is:  blatant discrimination.

 In Kellogg v. Ball State University d/b/a Indiana Academy for Science, Mathematics, and Humanities, Cheryl Kellogg was hired to be a teacher. The hiring director told her that she “didn’t need any more [starting salary] because he knew her husband worked.” Kellogg suffered the effects of this “outdated and improper approach” to her starting salary for the next 12 years.

When Kellogg finally sued for pay discrimination under Title VII and the Equal Pay Act, the Academy said that the pay differential was not discriminatory.  Instead, it claimed Kellogg’s lower pay was because of  (1) salary compression (paying newer hires more) and (2) difference in Kellogg and the male coworkers’ qualifications.

 In granting a motion for summary judgment, the district court ruled these two reasons were “undisputed” gender-neutral explanations for the salary disparity. 

 On appeal, Seventh Circuit said that the Academy “blatantly discriminated against Kellogg by telling her that, because her husband worked, she did not need more starting pay.” Such clear discrimination calls the sincerity of the Academy’s rationales into question.” It then reversed and remanded the case.

 This sharp rebuke was well deserved. 

 The district court erred in two significant ways.  First, it did not consider the statement that Kellogg did not need more pay because her husband worked.  It characterized that statement as a “stray remark.” The Seventh Circuit quickly dismissed that argument, noting that this statement “was not water cooler talk.” Instead, it was a straightforward explanation by the Academy’s director, who had control over setting salaries, as to why Kellogg did not need more money.  As it said, “few statements could more directly reveal the Academy’s motivations.”

 Second, the district court did not consider the discriminatory statement because it had been made outside of the statute of limitations period.  The Court of Appeals reminded that under the paycheck accrual role, as codified by the Lilly Ledbetter Fair Pay Act of 2009, a new cause of action for pay discrimination arises each time a plaintiff gets a paycheck resulting from an earlier discriminatory compensation practice—even one that occurred outside of the statute of limitations.

And, even apart from the paycheck accrual rule, it held Kellogg could rely on the statement’s to show that the Academy’s explanation for the pay disparity is pretextual because “time-barred acts [are allowed] as support for a timeline claim.”

Because the blatantly discriminatory statement that Kellogg did not need more pay because her husband worked put the Academy’s stated reasons for the pay different in dispute, the Seventh Circuit remanded this case.

That companies still make decisions about what to pay female employees based on a perception of whether a woman “needs” the money “because her husband works” or because her male coworker has a “family to support” is disheartening.

Let’s hope employers start to recognize this for what it is:  blatant discrimination.

Equal Pay:  It is Fundamental

Equal Pay: It is Fundamental

The importance of equal pay just got a shout out in a recent Fifth Circuit case. The money quote is:

“Equality of opportunity is fundamental to who we are, and to who we aspire to be, as a nation. Our commitment to this ideal is deeply engrained in our Constitution and in numerous state and federal laws. And a core component of our promise of equal opportunity, regardless of the circumstances of one’s birth, is non-discrimination in pay. … But what we do not accept are pay disparities due to the employee’s race or sex.”     Lindsley v. TRT Holdings, Inc. 2021 WL 62251(5th Cir. 2021).

Here, Sarah Lindsley was Food & Beverage Director at the Omni Hotel in Corpus Christi.  Her starting pay was $11,649 lower than that of her male predecessor. Her starting salary was also lower than his two male predecessors.  

Lindsley sued for pay discrimination under the Equal Pay Act, Title VII, and Texas Labor Code Chapter 21. To establish a prima facie case under the Equal Pay Act, Lindsley had to show that “she performed work in a position requiring equal skill, effort, and responsibility under similar working conditions” and that she was paid less than members of the opposite sex.  To establish her prima facie case under Title VII and Texas Labor Code Ch. 21, Lindsley had to show she was paid less than members of the opposite sex for “work requiring substantially the same responsibility.”

Lindsley showed that the three men who held the exact same job she held before her were all paid more than she was paid. Yet, the district court concluded Lindsley introduced no evidence to show that her job as Food & Beverage Director was similar to her predecessors aside from having the same job title.

The Fifth Circuit made short shrift of that argument, saying “far from failing to show that her job was in any way similar, Lindsley showed that she held the same position  as Walker and Pollard did, at the same hotel, just a few years after that did—and that she was paid less than they were.”  It concluded that “no more is needed to establish a prima facie case.”

Because Omni had not put forth a non-discriminatory reason to explain the pay disparity, the Fifth Circuit reversed and remanded the case.

Here, Lindsley’s predecessors were paid more than she was paid.  One often forgotten fact is that a successor in a job can also be cited as an appropriate comparator.  See 29 CFR sec. 1620.13(b)(4). 

The Fifth Circuit got this case right.  If a woman is paid less than the men who preceded her in the same job, a claim exists.

What remains to be seen in further litigation is how the company will explain the reason for the pay difference.  Stay tuned.

Stop Joking and Start Leading

Stop Joking and Start Leading

Stop Joking and Start Leading

Dallas sportscaster Dale Hansen recently stepped into controversy when he made a bad joke about women’s pay.

In an on-air conversation with meteorologist Pete Delkus, Delkus complimented Kristen Welker for the excellent job she did moderating the final Presidential debate.  When  Delkus said, “Someone really smart finally put a woman in charge and look what she did tonight,” Hansen inexplicably responded with, “If you have a woman like a co-anchor or news director or station manager, I think it’s a fantastic thing because they work cheaper – and that leaves more money for you and me.”

Wow.  To his credit, Hansen was quick to own that his “joke” was a “horrible joke,” and he sincerely apologized for it.

However, it raises the question:  why are we joking about women earning less than men anyway?

It is time for people like Hansen – who is in a leadership role and with a voice—to stop joking about benefitting from the fact that women are paid less and lead the effort for real change.

In his apology, Hansen acknowledged that equal pay is a real problem that has affected even his own daughter and granddaughter.  Hansen acknowledged that it is offensive, so many women have to fight for equal pay. Hansen claims he cares about the pay disparity.

So, the question becomes:  what is he doing about it?

Male leaders need to ask themselves the question:  What am I doing to stop this problem?

One first step is for each employee in a company to pressure employers to allow pay transparency.  Each employee needs to discover what peers are paid.  Men in leadership need to take a hard look at salary data and look for areas when women are being paid less and then ask why that is happening. 

Salesforce is an example of one company that took on this challenge and did it right, as reported by Wired. https://www.wired.com/story/how-salesforce-closed-pay-gap-between-men-women/.

What is most important, Salesforce recognized this is an ongoing issue.  There is no “one time” fix.  They have to continually monitor pay data to make sure that they do not slip backward.

In a media company, where Hansen works, it is far too common for talent contracts to contain confidentiality provisions that prevent employees from sharing the terms of their contract.  Thus, the employees are explicitly prevented by the contract from sharing pay information.

This can be an automatic violation of the National Labor Relations Act.  When challenged, a media company might need to rewrite all of its talent contracts.  It will take many of those challenges to accomplish that change in the industry.  However, making sure that an employee can share his or her salary with other co-workers without violating a contract will be a huge first step in eradicating pay discrimination.

Hansen is not the first man to make a bad joke about benefitting from the pay disparity.  However, it is still deeply disappointing when senior leaders actively try to take advantage of the pay disparity to hire a woman for a role “because they work cheaper” or joke about the fact that leaves more money on the table for the male employees.

Stop joking and start leading the charge to fix this.

Change The Law

Change The Law

If you do not like the law, change the law.

Sometimes, badly drafted laws lead to an unjust outcome. When that happens, we need to change the law.

Ruth Bader Ginsburg, the revered United States Supreme Court justice, died on September 18, 2020. When she died, I remembered how her powerful dissent in Lilly Ledbetter v. Goodyear Tire & Rubber Co. caused Congress to change the law. Justice Ginsburg’s strong dissent explained why the law needed to be changed and gave Congress a road map to follow.

At Fitzgerald Law, pursuing equal pay is a passion. And the story of Lilly Ledbetter explains why we sometimes need to focus our efforts on changing bad laws.

Lilly Ledbetter had worked for Goodyear for decades—paid less than men the entire time. Ledbetter did not know she was paid less than her male peers. Goodyear—like most employers—did not make that fact public knowledge. Only decades into her career did Ledbetter discover she had been underpaid. When that happened, she sued.

One of her claims alleged pay discrimination under Title VII. However, Ledbetter had a problem. Under Title VII, you must file a charge of discrimination with the EEOC within 300 days of an “adverse employment action.” The issue:  was the “adverse employment action” Goodyear’s original decision to pay Ledbetter less than her male peers, or was it each paycheck in which she was underpaid?

This mattered a great deal. If the adverse employment action was Goodyear’s original decision to pay Ledbetter less, the 300-day deadline to file her charge had expired decades before. Yet, if it was based on each paycheck she received in which she was paid less than her male peers, then Ledbetter’s charge was timely filed.

The Supreme Court ruled that the deadline began on the date the discriminatory decision to pay Ledbetter less had been made by Goodyear. Never mind that Ledbetter did not learn of the decision for decades. 

So, Lilly Ledbetter lost.

However, Ruth Bader Ginsburg’s brilliant dissent explained how this outcome was a complete travesty of justice. She eloquently explained how companies hide pay discrimination and make it hard for a woman to discover she is underpaid compared to male peers.  She decried the injustice of it.

The many people who recognized the injustice of this result went to work.  They changed the law. 

In 2009, the first law that President Barack Obama signed into effect was the Lilly Ledbetter Fair Pay Act.  This law revised Title VII to clarify that the deadline to file a complaint of pay discrimination runs from each discriminatory paycheck—not the original decision to pay the employee less.

This landmark law changes the game and gives women a true chance to discover and timely file pay discrimination claims.

However, our work is not done.

Most people do not appreciate that the Texas law protecting women from pay discrimination claims requires that a charge be filed within 180 days of the “adverse action.”  For the past ten years, Texas refused to amend this law to adopt a state version of the Lilly Ledbetter Act.

So, in Texas, to pursue a pay discrimination claim under state law, you must file a charge of discrimination within 180 days of when the discriminatory pay decision was made by the company. 

Because companies take pains to keep salary data confidential, the odds of employees meeting that deadline are slim.

Texas lawmakers are failing women.  There is no good reason not to adopt a state equivalent of the Lilly Ledbetter Act—unless it is just an effort to allow companies to continue to pay women less and get away with it.

It is time to ask more of our Texas state senators and representatives. As we head into a new legislative session in 2021, ask them to do more.

 Let us continue the fight Ruth Bader Ginsburg started. If you do not like the law, change the law.