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Fix the Problem The First Time

Fix the Problem The First Time

by | Oct 2, 2021 | Equal Pay, Pay Issues, Workplace Issues

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.

But Your Husband Has A Job…

But Your Husband Has A Job…

by | Feb 18, 2021 | Discrimination, Equal Pay, Gender Discrimination, Pay Issues

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.