Developments In Equal Pay Litigation - 2022 Update

© 2022 Seyfarth Shaw LLP Developments in Equal Pay Litigation | 53 expelled from the partnership “for any reason,” and that the plaintiff had no opportunity to negotiate the arbitration provision because the partnership agreement had been adopted by the capital partners before she joined the firm. 456 Turning to the arbitration provision itself, the court held that the provision’s limitation of remedies would prevent plaintiff from obtaining some of the remedies available to her under her statutory claims, including the right to backpay, front pay, reinstatement, or punitive damages under California’s Fair Pay Act. 457 The arbitration provision stated that the arbitrators would have no authority to substitute their judgment or override determinations of the firm’s partnership or Executive Committee. 458 The court held that this would constrain the relief the arbitration could provide and would prevent the arbitrators from providing remedies that would otherwise be available in a court of law. 459 In addition, the court held that the provisions that required plaintiff to pay half the costs of arbitration and her own attorneys’ fees, and the confidentiality provision, rendered the agreement unconscionable and therefore void under California law. 460 3. Proving An “Establishment” The EPA requires plaintiffs to compare their wages against other employees within the same physical place of business in which they work. According to regulations issued by the EEOC, a single establishment “refers to a distinct physical place of business” within a company. “[E]ach physically separate place of business is ordinarily considered a separate establishment” under the EPA. The regulations contrast this with the entire business, or “enterprise,” which “may include several separate places of business.” 461 Courts presume that multiple offices are not a “single establishment” unless unusual circumstances are demonstrated. 462 Not surprisingly, defining the scope of the establishment for purposes of comparing salaries and wages is a frequently contested issue in EPA litigation. For example, in In Moazzaz v. Metlife, Inc. , 463 a Senior Vice President and Chief Administrative Officer and Interim Global Head of Digital Strategy alleged that she was paid less than male employees with similar-level positions, such as the Head of Japan Operations and Europe, Middle East and Africa Chief 456 Id. at 694. Whether non-equity law partners can be considered “employees” under the federal EPA has been the subject of other recent equal pay litigation. For example, in Campbell v. Chadbourne & Parke LLP , No. 16-cv-6832 (JPO), 2017 WL 2589389 (S.D.N.Y. June 14, 2017), a female partner claimed that she was paid less than her male peers. The law firm defendant tried to dispense with the claims quickly—before substantial discovery had taken place—by arguing that the term “partner” and the terms of the operative partnership agreement foreclosed the possibility that female partners could be considered employees under the EPA. Id. at *2. The court denied summary judgment on the grounds that additional discovery was necessary to determine “employment” status under the factors set forth in Clackamas Gastroenterology Assocs., P.C. v. Wells , 538 U.S. 440 (2003). Those factors are: (1) whether the organization can hire or fire the individual or set the rules and regulations of the individual's work; (2) whether and, if so, to what extent the organization supervises the individual's work; (3) whether the individual reports to someone higher in the organization; (4) whether and, if so, to what extent the individual is able to influence the organization; (5) whether the parties intended that the individual be an employee, as expressed in written agreements or contracts; and (6) whether the individual shares in the profits, losses, and liabilities of the organization. Campbell , 2017 WL 2589389, at *2 (citing and quoting Clackamas Gastroenterology Assocs., P.C. , 538 U.S. at 449-50). Plaintiffs argued that additional discovery would show that the law firm’s hiring, firing, and promotion decisions, as well as decisions concerning any individual partner’s degree of control, autonomy, and access to profits are determined exclusively by the firm’s Management Committee. Id. at *3. Given the fact-sensitive nature of the factors used to determine employment status, the court denied the law firm’s motion for summary judgment until additional discovery could be taken relating to those factors. The lawsuit later settled. 457 Ramos , 239 Cal Rptr. 3d at 696-97. 458 Id. at 696. 459 Id. 460 Id. at 704. 461 29 C.F.R. §1620.9(a). 462 See Kassman v. KPMG LLP , 416 F. Supp. 3d 252, 287 (S.D.N.Y. 2018) (finding that pay and promotion decisions were not sufficiently “centralized” to amount to “unusual circumstances” warranting a finding that the many offices and practice areas qualify as a single “establishment” under the EPA even because “although [defendant] set generally applicable guidelines, individual pay and promotion decisions were left to the discretion of local practice area leaders,” which decisions were “reviewed by firm leadership on an aggregate basis against budget”); Meeks v. Computer Assocs. Int'l , 15 F.3d 1013, 1017 (11th Cir. 1994) (holding that evidence did not “demonstrate the level of centralization necessary to justify treating all of the company's technical writers as working at a single establishment” where “the specific salary to be offered a job applicant is determined by the local supervisor”). 463 Moazzaz v. Metlife, Inc. , No. 19-cv-10531 (JPO), 2021 WL 827648 (S.D.N.Y. Mar. 4, 2021).