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.