Developments In Equal Pay Litigation - 2022 Update

© 2022 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 37 impermissibly applied a “market factor” theory to evaluate his claim, arguing that it is impermissible to justify a wage disparity solely upon the “going market rate” for employees of a certain gender. 296 The Tenth Circuit held that this theory only arises where an employer purports to rely on the “going rate” for employees based on their gender. 297 Although setting an employee’s salary based solely on what the market would pay male versus female employees would clearly violate the EPA, there was no evidence to suggest that is what happened. 298 The Tenth Circuit concluded that “where an employer sets a new employee's salary based upon that employee's previous salary and the qualifications and experience the new employee brings, the defendant has successfully invoked the Act's affirmative defense.” 299 This is because “the EPA only precludes an employer from relying solely upon a prior salary to justify pay disparity.” 300 This issue continues to divide the district courts. For example, in Abe v. Virginia Department of Environmental Quality , 301 the Eastern District of Virginia was presented with the following question: “Does using prior salary as a factor in setting an employee’s starting salary constitute a per se violation of the Equal Pay Act . . .?” 302 In that case, four named plaintiffs and twenty opt-in plaintiffs alleged that their employer’s “past practice of using pay history to determine new hire’s salary perpetuates the gender wage gap and violates the EPA.” 303 They argued that the court should adopt the reasoning of the Ninth Circuit in Rizo v. Yovino and hold that prior salary history can never constitute a “factor other than sex” under the EPA, either alone or in combination with other factors. 304 The court declined to do so, noting that the Fourth Circuit “has not delineated the precise circumstances under which an employer may rely on prior salary as an affirmative defense in an EPA case.” 305 But it nevertheless held, relying on Spencer v. Virginia State University , that the Fourth Circuit “has clearly indicated that it does not prohibit an employer from doing so.” 306 The court further rejected plaintiffs’ argument that the employer should at least have to prove that its use of salary history is job-related, as they argued the Fourth Circuit held in another case, EEOC v. Maryland Insurance Administration . 307 The Abe court sidestepped the issue. It held that it was not necessary to resolve that question to decide the narrow issue before the Court; namely: “May [defendant] raise prior salary as an affirmative defense?” 308 Based on the Fourth Circuit’s decision in Spencer , the Court held that it could and denied Plaintiff’s motion to strike the employer’s affirmative defense that was based on prior salary. 296 Id. at 507. The employee relied on prior Eleventh Circuit and Supreme Court precedent, Mulhall v. Advance Security, Inc. , 19 F.3d 586, 596 n.22 (11th Cir. 1994) and Corning Glass Works v. Brennan , 417 U.S. 188 (1974). In Corning Glass Works , the Supreme Court rejected an argument that an employer's higher wage rate for men on the night shift was permissible, holding that: “The differential arose simply because men would not work at the low rates paid women inspectors, and it reflected a job market in which [employer] could pay women less than men for the same work. That the company took advantage of such a situation 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.” 417 U.S. at 204-05. 297 Angove , 70 F. App’x at 508. 298 Id. 299 Id. 300 Id. (emphasis in original). The Sixth Circuit has also adopted the reasoning of the Eleventh and Tenth Circuits. See Perkins v. Rock-Tenn Servs., Inc. , 700 F. App’x 452, (6th Cir. 2017); Balmer v. HCA, Inc ., 423 F.3d 606, 612 (6th Cir. 2005), abrogated on other grounds by Fox v. Vice , 563 U.S. 826 (2011). 301 Abe v. Va. Dep’t of Env’t Quality , No. 3:20-cv-270, 2021 WL 1250346 (E.D. Va. Apr. 5, 2021). 302 Id . at 1. 303 Id . 304 Id . at 2. 305 Id . 306 Id. , at 2-3 (citing Spencer v. Va. State Univ. , 919 F.3d 199, 202-03 (4th Cir. 2019) (emphasis in original). The court noted that Spencer involved a female sociology professor who alleged that she had been discriminated against in terms of her compensation because she was paid less than two comparable male professors whose salary was set as a percentage of their previous salaries as administrators at the same university. The Fourth Circuit determined that the university’s decision to set starting salaries for those purported comparators in that way established that the alleged pay differential was due to a factor other than sex. The court in Abe interpreted this to mean that “at minimum, the Fourth Circuit does not prohibit employers from raising prior salary as an affirmative defense in an EPA case.” Id . at 3. 307 EEOC v. Maryland Ins. Admin. , 879 F.3d 114 (4th Cir. 2018). 308 Abe , 2021 WL 1250346, at 4.