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.

Basic Terms In A Severance Agreement

Basic Terms In A Severance Agreement

Laid off with a severance agreement to review?  What does all of that stuff in this agreement mean anyway?

Life is very stressful right now. COVID-19 and the shelter in place orders and the resulting economic meltdown have dealt many businesses severe—if not fatal—blows. For businesses trying to survive, making very tough decisions about laying off employees is part of survival.

It is brutal for the companies.  It is brutal for the affected employees and their families.  And it can cause confusion.  Often, a company will offer a severance agreement (also called a separation agreement) to an employee. For those who rarely look at separation agreements, this document can be confusing.

Most Severance Agreements Contain Basic Terms. These terms can include:  

  • The Money: Most of the time, the company will give the employee an amount of money and other benefits in exchange for the employee giving the employer a “release” of all possible claims. The other benefits can include things such as agreeing to pay insurance premiums for a period of time or agreeing to pay for outplacement.
  • The Release: One party agrees not to sue the other party.  Usually, the employee agrees to release any potential claims against the employer up to the date the employee signs the agreement. However, this can also be mutual where both the company and the employee agree not to sue the other party.
  • Confidentiality: Most agreements will require the employee to keep the terms of the agreement confidential. That means that the employee cannot disclose the terms of the package received to anyone. Usually, the employee may disclose to a spouse or immediate family, an attorney, a financial advisor and if otherwise required by law.
  • Re-employment rights: Some agreements will specify that the employee cannot reapply at the company if it accepts the separation payment. Other agreements specify that the employee has the right to reapply, but that some of the separation benefits may get offset if the employee is rehired.
  • Amount of time to sign/revocation rights: For employees over age 40, a company must include certain language in a separation agreement. The company must give the employee at least 21 days to consider the agreement (more time when a reduction in force). The company also has to tell the employee that the employee may have the agreement reviewed by an attorney and that, once the employee signs it, the employee may change his/her mind and revoke it for 7 days after signing.
  • Reminder of employee obligations: usually, the company will remind employees of their obligations to return company property and to continue to protect company confidential business information and trade secrets.

Like ice cream, separation or severance agreements come in many flavors and formats. Some are very simple. Some are over 10 pages long. Some are very complex.

What all have in common is that they involve important legal rights and obligations. So, every employee needs to know and understand what he or she is signing before actually signing it. If you are affected by a job termination and need help reviewing a separation agreement or severance agreement, contact us. We can help.

 

Families First Coronavirus Response Act

Families First Coronavirus Response Act

What you need to know about the Families First Coronavirus Response Act

In response to the national Covid-19 or “coronavirus” emergency, Congress recently passed the Families First Coronavirus Response Act. For employees, there are two key parts to this statute.The first creates an emergency expansion of the Family & Medical Leave Act and the second pertains to paid sick time during the emergency. These two laws will become effective on April 2, 2020. I discuss them in more detail below.

Emergency Family and Medical Leave Act

This amends FMLA from April 2, 2020 to December 23, 2020 for an employee who has a qualifying need related to a public health emergency.

  • A “qualified need related to a public health emergency” means that the employee in unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of care has been closed or the child care provider of such son or daughter is unavailable due to a public health emergency.
  • A “public health emergency” means an emergency with respect to COVID-19 declared by Federal, State or local authority.

To be eligible, the employee must have worked for a company with fewer than 500 employees for at least 30 days. For the first 10 days of leave, leave is unpaid.  After that, the employer shall provide paid leave at two-thirds of the employees pay rate. However, in no event shall such paid leave exceed $200 per day or $10,000 in the aggregate.

An employee who needs to take such leave shall provide such notice of the need for leave as is practicable. An employee who takes this emergency FMLA may be eligible to be restored to his or her position.  However, the job restoration requirements have caveats.

Companies with less than 50 employees can seek an exemption from the Department of Labor for all of these requirements.

Emergency Paid Sick Leave Act

Under this new law, an employer shall provide to each employee employed by the employer paid sick time to the extent that the employee is unable to work (or telework) due to a need for leave because:

  • the employee is subject to a Federal, State or local quarantine or isolation order related to Covid-19;
  • the employee has been advised by a health care provider to self-quarantine due to concerns related to Covid-19;
  • the employee is experiencing symptoms of COVID-19 and seeking a medical diagnosis;
  • the employee is caring for an individual who is subject to an order as described in subparagraphs 1 or has been advised as described in subparagraph 2;
  • the employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable due to COVID-19 precautions;
  • the employee is experiencing any other substantially similar condition specified by the Secretary of HHS in consultation with the Secretary of the Treasurer and the Secretary of Labor.

This new law applies to companies who are engaged in any industry affecting commerce that employ less than 500 people.

Hours of Paid Sick Leave

A full-time employee will receive to 80 hours of paid sick leave and a part-time employee get a number of hours equal to average that the employees works over 2 weeks. This paid sick leave shall be available for immediate use.

Protection from Retaliation

An employer cannot discharge, discipline, or in any other manner discriminate against any employee who (1) takes leave in accordance with this act or (2) has filed any complaint or instituted any proceeding related to this act. If the employer does so, there damage and penalties provisions of the FLSA kick in and give the employee a claim against the employer.

Paid Sick Time

The amount of paid sick leave will vary depending on the reason for the sick leave.  If it is reasons (1), (2) or (3), the employee will get paid the regular rate of pay except that the pay shall not exceed $511 per day and $5,110 total. 

If the employee is using the paid sick leave for a reason described in (4), (5), or (6),  then the employee will be paid 2/3 of the employee’s rate of pay and not more than $200 per day and $2000 total.

Not later than 15 days after the enactment of this Act, Secretary of Labor shall issue guidelines to assist employers in calculating the amount of paid sick time.

After the first workday an employee receives paid sick time, an employer may require the employee to follow such reasonable notice procedures in order to continue receiving such paid sick time.

Summary

These laws are new, and they are tricky.  Companies are just now trying to figure out how to comply with these laws and employees are trying to figure out their rights.

If you have questions about your rights, please contact us.

Getting Help

if you believe you have experienced retaliation for reporting tax fraud or violations of the internal revenue code, we can help. Click the Tell Us About Your Problem button to start.

Big Win on the Equal Pay Front

Big Win on the Equal Pay Front

Boost For Equal Pay

In February, people pursuing equal pay claims got a big boost from the Ninth Circuit.

The Equal Pay Act was passed to combat pay differences between members of the opposite sex.  Though it applies to Under the act, an employer has several affirmative defenses it can rely on to justify a pay disparity. These include a difference in pay based in (1) a seniority system, (2) a merit system, (3) a pay system based on quantity or quality of output, or (4) any factor other than sex.

This law affirmative defense generates the most litigation by far.  And, the issue the Ninth Circuit looked as was whether a woman’s prior salary at an earlier employer can be a “factor other than sex” that allows an employer to pay a woman less than male employees who perform the same work.

This case is Rizo v. Yovino and it has been a long time in the making.  Rizo originally filed her lawsuit in 2014.  Rizo learned she was paid less than her male peer.  Her employer defended the pay disparity, which was based solely on her prior salary at an earlier job, as a “factor other than sex.”

After a trip to the Supreme Court and back, an en banc Ninth Circuit definitively held that an employer cannot cite a woman’s prior salary as a “factor other than sex” to justify paying a woman less than her male peers doing the same work.

As the Ninth Circuit noted, because equal pay disparities are so pervasive, allowing an employee to escape liability by relying on prior pay would simply perpetuate the very discrimination that the Equal Pay Act was passed to eliminate.

This is a huge win for anyone trying to pursue an equal pay claim as employers rarely have a good reason to justify a pay disparity.  An equal pay case does not require proof of a discriminatory intent.  Instead, all that is required is evidence that one gender is paid less than the opposite gender for doing the same work.  When that is shown, the employer must show it some job related basis for that difference. And, now that job related factor must be something other than a showing that the employer had a lower salary in an earlier job and thus deserved a lower salary in the current job.

 Getting Help

If you believe you have been the victim of pay discrimination, please contact my firm to see if we can assist you. Click the Tell Us About Your Problem button to start.