Equal Pay Act (EPA)
What should you do about getting paid less for the same work? It is old news that women are often paid less than men for similar work. Though this is not an issue that only caregivers face, it certainly affects caregivers, given that the majority of them are women. So, when are pay disparities illegal? It is unlawful for a company to pay a woman less than a man for similar work when the company does not have a legitimate reason for doing so. That’s what happened to Linda Lovell. Ms. Lovell was an accomplished woman with an undergraduate degree in textile chemistry and a master’s in business administration. After gaining significant work experience, Lovell joined a subsidiary of Verizon called BBNT, which provided contract research and development services to the Department of Defense. Although Ms. Lovell worked a reduced schedule of thirty hours per week, she often made herself available to clients on her day off. Ms. Lovell, the only woman in her workplace, was not rewarded for her extra effort. On the contrary, she was often taken advantage of by her male colleagues. For instance, though she would often let male counterparts perform billable work for her clients, which employees had to do to be eligible for bonuses, her male counterparts did not return the favor. Worse, some of her colleagues charged matters to her clients without informing her, resulting in budget overruns. And it goes on. Ms. Lovell was the only employee in her group who did not receive a laptop computer, though she made multiple requests for one. She was also not invited to some company training sessions. For all her trouble, Ms. Lovell learned that she was paid less than her male colleagues, at least one of whom did the exact same type of work she did. In addition, in 2003, Ms. Lovell received a lower raise than her male colleagues. So, she sued. The name of her case is Lovell v. BBNT Solutions, 295 F. Supp. 2d 611 (E.D. Va. 2003). The opinion in the case was issued by Judge Thomas S. Ellis of the US District Court for the Eastern District of Virginia. She sued under two statutes: the EPA and Title VII of the Civil Rights Act. I won’t go into all the details here. The intersection of these two laws is highly technical. If, after reading this, you believe that your employer may be paying you less than your male colleagues, go talk to a lawyer. (The law would apply equally to men: that is, it would be illegal to pay a man less than a woman for the same work just because he’s a man, but that is a rarity.) Here are some basics so that you have a sense of what to look for. The EPA makes it unlawful for an employer to pay an employee at a rate less than that paid to employees of the opposite sex for equal work. This law is part of the FLSA, which is, in many respects, very favorable to employees because it does not require a showing that the employer intended to discriminate. You can find the text of the law at 29 U.S.C. § 206(d)(1). To bring a case for a violation of the EPA, a plaintiff must be able to show the following three factors: 1. The employer paid different wages to employees of the opposite sex. This can include someone hired to replace the terminated employee. 2. The employee holds a job that requires equal skill, effort, and responsibility. 3. The jobs are performed under similar working conditions. When comparing jobs, the title of the job is not the deciding factor. An employee must show that a specific male—called a “comparator”—was paid at a higher rate even though they shared a common core of tasks. When comparing pay, it is generally the rate of pay, rather than a difference in the total amount of pay, that is relevant. So, a woman on a parttime basis could win an EPA claim against a fulltime male employee if she is paid at a lower hourly rate. When looking at the “equal skill” factor, a court should look at the skill required for the job, not just skills possessed by the employees. For instance, an employer could not take a male employee in a marketing department and point to his PhD in physics as justification for a higher pay rate when that degree was not required for the job. The powerful aspect of the EPA is that, once an employee has met these factors, it is the employer’s burden to disprove that a violation has occurred, and this burden never shifts back to the employee. This is different from claims brought under anti discrimination statutes like Title VII. Also, unlike Title VII, to win an EPA claim, the employee does not have to show why the employer established the pay rate the way it did. Title VII requires an employee to show evidence of what was going on in the employer’s head, which can be difficult. This tilted playing field makes these cases easier to litigate and settle. All that is required is a review of the relevant records and perhaps a deposition or two to establish the pertinent factors. That’s not to say they are easy to win—no case is. But it does make the EPA, and other claims under the FLSA, powerful ones for employees treated wrongly. Even if an employee shows the three factors above, an employer can win an EPA lawsuit if it can demonstrate that the difference in pay rate was based on one of the following four factors: 1. A seniority system, 2. A merit system, 3. A system that measures earnings by quantity or quality of production, or 4. A difference based on any other factor other than sex. As you can imagine, the last one, “any other factor other than sex,” is a wideopen door. Two of the big factors that employers try to use are education/background and offering a higher starting salary to induce someone to accept an offer. The first thing to remember is that it is not enough for the employer to throw up one of these reasons and win. It must prove to the fact finder (i.e., the judge or jury) that one of these reasons justifies the disparity in rate of pay. Education/background is particularly fertile ground for employers, given that there is almost always at least some difference in background in employees. The key to remember is that to rebut an EPA claim on this basis, an employer must prove the male employee has a combination of education and experience that is more valuable—not merely different—than the woman bringing the case. For instance, in the Lovell case discussed above, the employer argued at trial that it was justified in offering the male employee, Mr. McNamara, a higher rate of pay because he held an undergraduate degree in mechanical engineering and a master’s degree in structural engineering. Moreover, he had played a significant role in preparing multimilliondollar bid proposals for a competitor before joining BBNT. But in declining to overturn the jury award, the courtnoted evidence at trial showed that Ms. Lovell had a similar level of education, she had significant work experience prior to joining BBNT, and she had an exceptional history at BBNT, which included a The judge noted that the jury reasonably could have concluded that Ms. Lovell’s background was equally valuable to the company. BBNT also argued that Mr. McNamara enjoyed a higher rate of pay because the company offered him a higher starting salary to lure him from a competitor. However—and this is an example of why deposition testimony is so important—the court noted that BBNT’s department manager had testified in his deposition that if the market was such that the company had to offer a salary premium to attract talent, it likely would have raised the salary of current employees to retain them. So, the court noted, the jury could have concluded that the hiring starting salary for Mr. McNamara did not explain the continued difference in the rate of pay. Without that admission from the company’s own witness, Ms. Lovell might well have lost this case. Keep your eye on the defense that the employer had to offer a higher rate of pay to attract the male employee who now maintains that higher rate of pay. This defense, which is often rolled out by employers, could have the effect of making legal an unfortunate fact in the workplace. A number of studies have suggested that men sometimes receive a higher rate of pay for one primary reason: they ask for it. Women (again, as a general rule) are historically more reluctant to aggressively negotiate for a higher salary. At least one federal court has explicitly ruled that aggressive salary negotiations alone cannot be a defense to an equal protection claim: Dreves v. Hudson Group, No. 2:11cv4, 2013 U.S. Dist. LEXIS 82636 (D. Vt. June 12, 2013). In addressing the issue of salary negotiations, the court reasoned as follows:Second, there is simply no basis for the proposition that a male comparator’s ability to negotiate a higher salary is a legitimate businessrelated justification to pay a woman less. To hold otherwise would eviscerate the federal and Vermont equal pay provisions. It would also require the Court to accept a theory that is essentially indistinguishable from the repudiated argument that employers are justified in paying men more than women because men command higher salaries in the marketplace. See Corning Glass Works v. Brennan, 417 U.S. 188, 205, 94 S. Ct. 2223, 41 L.Ed.2d 1 (1974) (“That the company took advantage of [a job market in which it could pay women less] may be understandable as a matter of economics, but its differential nevertheless became illegal once Congress enacted into law the principle of equal pay for equal work.”). Reliance on the difference in value that the market places on women and men “became illegal once Congress enacted into law the principle of equal work for equal pay.” Id. In this Court’s view, a pay disparity is no more justified when it is the result of a single negotiation than when it is the result of a marketwide phenomenon, for what is a marketplace other than an amalgamation of many negotiations? Permitting an employer to defend itself simply by showing that a disparity was the product of one negotiation with a male employee would lead to the same result: a marketplace that values the work of men and women differently.In support, in a footnote, the court cited recent studies about gender disparity in salary negotiations:
The Court notes that there are a number of studies that suggest that gender plays a significant role in negotiation outcomes. See, e.g., Hannah Riley Bowles, Linda C. Babcock, and Kathleen McGinn, “Constraints and Triggers: Situational Mechanics of Gender in Negotiation.” 89 J. Personality & Soc. Psychol. 951 (2005). Other studies show that women and men face different social incentives when deciding whether to negotiate compensation, particularly when they must negotiate with a male supervisor or evaluator. See Bowles, Hannah Riley; Babcock, Linda; Lai, Lei, “Social Incentives for Gender Differences in the Propensity to Initiate Negotiations: Sometimes It Does Hurt to Ask,” 103 Org. Behav. & Hum. Decision Processes, 84 (2007).